The dollar index (DXY00) on Wednesday rose by +0.12% and posted a 2-week high. On Wednesday, the dollar recovered from early losses and moved higher after stocks gave up an early advance and turned lower, which boosted liquidity demand for the dollar. The dollar on Wednesday initially moved lower as Fed-friendly U.S. economic reports on Nov ADP employment and Q3 nonfarm productivity undercut the dollar.
Wednesday’s U.S. economic news was dovish for Fed policy and bearish for the dollar. The Nov ADP employment change rose +103,000, weaker than expectations of +130,000. Also, Q3 nonfarm productivity was revised upward to 5.2% from 4.7%, better than expectations of 4.9% and the most in three years. In addition, Q3 unit labor costs were revised downward to -1.2% from the previously reported -0.8%, a bigger decline than expectations of -0.9%.
