* U.S. dollar helped by strong private sector jobs data
* Swedish crown and Canadian dollar slump
* Fed minutes later in session, ECB meeting on Thursday are
* Focus on U.S. jobs data on Friday
By Julie Haviv
NEW YORK, Jan 8 The dollar gained against a
basket of currencies on Wednesday as a better-than-expected data
gauging U.S. private sector jobs growth suggested recovery in
the world's largest economy gained traction at the end of last
U.S. private employers added 238,000 jobs in December, more
than expected and the best reading in 13 months, a report by a
payrolls processor showed on Wednesday. ADP's National
Employment Report also revised November's job gains higher.
"It was without a doubt good report," said Jacob Oubina,
senior U.S. economist at RBC Capital Markets in New York.
"The ADP report is doing a much better job at predicting the
Labor Department's number for nonfarm payrolls, so this data
will undoubtedly change forecasts for Friday's release," he
The ADP report comes two days ahead of the government's
nonfarm payroll report, a measure of the labor market that is
more comprehensive and includes both public and private sector
Analysts are looking for 196,000 jobs to have been
added in December, along with a rise in private payrolls of
195,000. Friday's report may provide more clues as to how
quickly the U.S Federal Reserve will cut back on its bond-buying
program this year.
Minutes from the Fed's December meeting, at which the U.S.
central bank announced its decision to begin trimming its
stimulative monthly bond purchases, will be released later on
In early New York trade, the dollar rose 0.1 percent to
104.74 yen, down from an earlier high of 105.12 yen, but
above Monday's two-week low of 103.88. Last week the dollar
reached a five-year high of 105.44 yen.
Against a basket of six major currencies, the dollar
reached a six-week high of 81.048 and was last up 0.1 percent on
the day at 80.934.
The dollar also firmed against the euro, with the single
currency last trading 0.1 percent lower at $1.3504.
Dealers said trade was slowing somewhat ahead of the
publishing of minutes from the last meeting of the U.S. Federal
Reserve later on Wednesday, which will be scrutinized for signs
of how long the central bank will keep interest rates at record
"We think there may be some more room for the dollar to rise
tonight after the minutes," said Michael Sneyd, currency
strategist with BNP Paribas in London.
"Beyond that we are looking for an inflationary number on
payrolls which should support the Fed plan for tapering (of
monetary stimulus) ... and a stronger dollar."
He said BNP has a forecast of 215,000 new jobs created by
the world's biggest economy in December.
Action in European trade centered around the Swedish crown,
hurt by minutes from the central bank's last meeting that were
read as leaving room for more cuts in interest
The Swedish central bank's emphasis on macroprudential
measures to deal with the effects of household debt was read as
leaving the door open to another cut in interest rates. Minutes
from the bank's last meeting also showed that two members
supported a bigger cut in rates last month.
The dollar last traded 0.7 percent higher at 6.5594
crown. The euro traded 0.6 percent higher at 8.9227
BNP's Sneyd said he had expected the minutes to head off the
prospect of another hike and the lack of such as message had
hurt the crown.
"Markets had expected the door would be closed," he said.
"Overall these minutes looked very dovish. They look very
sensitive to any downside risk (on the economy)."
The Canadian dollar slid after a survey of Canada
purchasing managers came in lower than expected and the trade
deficit proved bigger than forecast on Tuesday.
That lifted the U.S. dollar to C$1.0828, its
highest since May 2010. It was last up 0.3 percent at C$1.0804,
according to Reuters data.
Comments by Bank of Canada chief Stephen Poloz that it
should keep its key interest rate on hold until data persuaded
it otherwise also weighed on the currency.