U.S. dollar slips in choppy trading

The dollar edged down against other major currencies on Wednesday, as stronger-than-expected U.S. jobs data and a U.K. budget release set off choppy trading in a market awaiting clues about the future policy paths of their respective central banks.

U.S. private payrolls growth surged in October, overcoming fears of temporary disruptions from hurricanes and strikes, according to the ADP National Employment Report.

Meanwhile, separate data showed the U.S. economy grew at an annualised rate of 2.8% in the third quarter, slightly lower than the 3% expected by economists.

The U.S. dollar index, which measures the currency against six major rivals, rose to 104.43 earlier in the session before losing ground 0.2% to 104.09. It rose to the highest since July 30 at 104.63 on Tuesday.

“I think the momentum in the U.S. economy looks pretty good still,” said Brad Bechtel, global head of FX at Jefferies in New York.

“Obviously, we’ll get a lot more data the end of this week with the nonfarm payroll figures. But expectations on the (Federal Reserve) have been dialed back quite a bit from pretty extreme levels. I think Friday’s report will inform how we view the Fed going forward.”

Mixed U.S. indicators overnight, showing a loosening U.S. jobs market but a confident consumer, provided little clarity on the outlook for Federal Reserve rates, allowing the greenback to drift lower with Treasury yields.

Recently though, economic readings have pointed to a resilient jobs market and economy, spurring traders to pare back their bets on rate cuts.

Matt Weller, head of market research at StoneX, in Grand Rapids, Michigan, said: “A 25bps post-election rate cut from the Fed appears to be a done deal at this point”. But he cautioned that a strong NFP report could set the stage for a pause as soon as December.

Both the dollar and U.S. bond yields have also been buoyed in recent days by rising speculation in markets and on some betting platforms of a victory in the Nov. 5 presidential election for Republican candidate Donald Trump – whose tariff and immigration policies are seen as inflationary – and who is standing against Democrat Kamala Harris.

That helped leading cryptocurrency bitcoin surge to near its all-time high from March at $73,803.25, as Trump has vowed to make the United States “the crypto capital of the planet”.

The token last changed hands at about $72,033, after pushing as high as $73,609.88 in the previous session.