Dollar falls after U.S. jobs data disappoints
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The dollar weakened against most currencies on Wednesday after a report showed hiring in the U.S. private sector fell short of expectations last month, which reduced the chances the Federal Reserve could wind down its stimulus program any time soon.
The U.S. currency had rallied in recent sessions on the view that some upbeat economic data could prompt the Fed to taper its $85 billion per month quantitative easing program, a mechanism viewed as negative for the greenback as it involves flooding the market with dollars.
But the moderate pace of hiring seen in May's ADP report may not be enough to persuade the Fed to limit the scale of QE. U.S. private employers added 135,000 jobs in May, according to the ADP National Employment Report on Wednesday, compared with economists' median forecast in a Reuters poll for an increase of 165,000.
"That expectation of tapering is probably going to be pushed out a little bit, that's why right now we're seeing that Treasury yields are a little bit lower and the dollar a bit weaker," said Eric Viloria, currency strategist at Forex.com in Bedminster, New Jersey.
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