* Dollar index pulls further away from eight-month trough
* Solid U.S. private-sector hiring lifts hope for nonfarm
* Aussie dollar eyes RBA speech, retail sales data
By Ian Chua
SYDNEY, July 3 The U.S. dollar clung onto modest
gains early on Thursday, having risen broadly on the back of a
report that showed solid hiring in the U.S. private sector.
The figures from payrolls processor ADP added to a string of
bullish U.S. data ranging from manufacturing to auto sales,
supporting the view that the U.S. economy has bounced back
smartly after a first-quarter slump.
Benchmark U.S. Treasury yields rose to the
highest in over a week at 2.63 percent in reaction to the data,
which in turned helped lift the dollar against a basket of major
The dollar index was last at 79.956, off an
eight-week trough of 79.740 plumbed on Tuesday.
Against the yen, the greenback rose to 101.78, having
only recently hit a six-week low of 101.23. The euro dipped to
$1.3657, from Tuesday's six-week high of $1.3724.
ADP said private employers added 281,000 workers to payrolls
last month, the largest since November 2012, offering hopes for
a healthy rise in nonfarm payrolls when the data is released
later on Thursday.
"Our economists agree with market consensus looking for
non-farm payrolls to rise by more than 200,000 for a fifth
consecutive month," analysts at BNP Paribas wrote in a note to
"If the forecast turns out to be correct, this will mark the
first five-month run of above 200,000 prints since January
But anyone expecting a more hawkish tone from the Federal
Reserve were left sorely disappointed after Fed Chair Janet
Yellen stuck to her dovish script.
Speaking at an International Monetary Fund event on
Wednesday, Yellen reiterated her view that regulation - not rate
policy - needs to play the lead role in combating excessive
Analysts said Yellen was pushing back against some Fed
officials who believe financial stability should be given a more
prominent place in formulating monetary policy.
The modest rebound in the dollar saw its Australian
counterpart fall back towards familiar territory, from an
eight-month peak above 95 U.S. cents.
The Aussie last traded at $0.9440, well down from
Tuesday's peak of $0.9505. The market was quick to book profits
on Wednesday in the wake of disappointing trade data.
Further selling could emerge if retail trade and building
approvals due at 0130 GMT come in soft. Ahead of that, investors
will be keeping a close eye on a speech by Reserve Bank of
Australia Governor Glenn Stevens.
Any mention of the local dollar being uncomfortably high
could send the Aussie down a few pips.
China's services PMI survey will also feature in Asia this
morning although trading is likely to be subdued ahead of
big-ticketed events including the European Central Bank (ECB)
"Although no action is expected from the ECB at its meeting
today, we anticipate that it will maintain its dovish tone in
the face of weak PMI prints, low inflation, and weak bank
lending," said analysts at BNP Paribas.
(Editing by Shri Navaratnam)