Early trade in New York: Dollar little changed against basket of currencies

The dollar was little changed against a basket of currencies on Wednesday as upbeat data on US services sector offset a weaker-than-expected report on private job growth, while the euro was broadly higher in step with a rise in higher euro zone bond yields.
US services industries grew at their fastest pace in 11 months in September, reinforcing the view of a steady economic expansion which would allow the Federal Reserve to raise interest rates later this year, analysts said. Wednesday's encouraging snapshot of the services sector from the Institute for Supply Management followed perceived hawkish remarks from regional Fed presidents Loretta Mester and Jeffrey Lacker earlier this week.
"This is adding to the view that December is the most likely rate-hike scenario for the Fed," said Omer Esiner, chief market strategist at Commonwealth Foreign Exchange Inc in Washington. The latest ISM services data offset a weaker-than-expected jobs reading from ADP. The payroll processor said on Wednesday US companies added 154,000 workers in September, the fewest since April.
The greenback's gains were also limited as traders remained cautious ahead of the government's payrolls report due at 8:30 am (1230 GMT) on Friday. The dollar index was unchanged at 96.172 after rising to 96.442 on Tuesday, its highest since August 9.
The greenback clung near a four-week peak against the yen. It was last up 0.55 percent at 103.42 yen. The euro soared to a five-year high versus the struggling pound and reached a three-week high against the yen. The euro rose to 88.43 British pence, a level last seen five years ago before retreating to 87.80 pence in US trading.
The euro zone common currency rose 0.6 percent to 115.90 yen after touching its highest in three weeks, while it was little changed versus the dollar at $1.1207. Sterling rose 0.2 percent to $1.2755 after falling earlier Wednesday below $1.27 for the first time in over three decades on worries that Britain's separation from the European Union could be rocky and have adverse economic consequences.