Dollar flat after U.S. data, euro rises with bond yields
By Richard Leong
NEW YORK (Reuters) - The dollar was little changed against a basket of currencies on Wednesday as encouraging data on the U.S. services sector offset a weaker-than-expected report on private-sector job growth, while the euro was broadly higher in step with a rise in higher euro zone bond yields.
U.S. services industries grew at their fastest pace in 11 months in September, reinforcing the view of a steady economic expansion which would allow the Federal Reserve to raise interest rates later this year, analysts said.
Wednesday's upbeat snapshot of the services sector from the Institute for Supply Management followed perceived hawkish remarks from regional Fed presidents Loretta Mester and Jeffrey Lacker earlier this week.
"This is adding to the view that December is the most likely rate-hike scenario for the Fed," said Omer Esiner, chief market strategist at Commonwealth Foreign Exchange Inc. in Washington.
The latest ISM services data offset a weaker-than-expected jobs reading from ADP. The payroll processor said on Wednesday U.S. companies added 154,000 workers in September, the fewest since April.
The greenback was locked in a tight trading range as traders remained cautious ahead of the government's payrolls report due on Friday at 8:30 a.m. (1230 GMT).
The dollar index was little changed at 96.101 .DXY after rising to 96.442 on Tuesday, its highest since Aug. 9.
The greenback hovered near a four-week peak against the yen. It was last up 0.7 percent at 103.56 yen. JPY= Continued...