Dollar surges on positive ADP report; data on manufacturing activity ahead

The dollar looked set to start the quarter off strong after an employment estimate from ADP.

On Wednesday payroll processing firm ADP reported that U.S. non-farm private employment rose by 237,000 last month, beating expectations for an increase of 218,000.

The economy created 203,000 jobs in May, whose figure was upwardly revised from a previously said increase of 201,000.

The U.S. Dollar Index was up 0.36% ahead of Wednesday’s report.

The ADP report is considered an important indicator for the Department of Labor’s employment estimate, but it has underestimated job gains in five of the last seven months. The monthly jobs report will be out Thursday, one day earlier than usual because markets will close Friday to mark the July 4 holiday.

Investors now await a report on U.S. manufacturing activity in June later in the morning.

The dollar was struggling to break above 123 yen, a psychologically important level with USD/JPY last trading at 123.03, 0.43% higher.

EUR/USD was last at 1.096 shedding 0.42%.

Earlier today, research group Markit said that Germany's manufacturing purchasing managers' index was steady at 51.9 last month, matching analysts' expectations.

France's manufacturing PMI edged higher to 50.7 in June from 50.5 the previous month, confounding estimates for an unchanged reading.

The British currency was also lower, with GBP/USD down 0.39% to 1.5649.

The U.K. manufacturing PMI fell to a 26-month low of 51.4 last month from 51.9 in May, whose figure was revised from a previously estimated reading of 52.0, below analysts' expectations for 52.5 rise in June.