Dollar Extends Gains after Strong ADP Report


The dollar extended gains versus the euro on Wednesday after a private sector report showed U.S. employers added a much higher than expected 189,000 jobs in November, suggesting government data on Friday may also show signs of strength in the labor market.

The report may also be an indication the slowdown in the U.S. economy may not be as severe as expected, analysts said. Economists polled by Reuters expected Wednesday's report to show an increase of 50,000 payrolls.

"This number not only beat market expectations but exceeded even the most wildly bullish projections," said Michael Woolfolk, a senior currency strategist, at the Bank of New York Mellon in New York. "It suggests things may not be as bad as thought, though what the market and Fed do will depend on the nonfarm payrolls number (on Friday)."

The euro traded lower at $1.4675 from $1.4720 prior to the data. The dollar was trading 0.8 percent higher at 110.59 yen


Reuters
12/5/2007 6:23:57 AM