The U.S. dollar moved higher against its major peers on Thursday, buoyed by data showing a bigger than expected increase in the country's private sector job growth in the month of May.
Data showing another drop in weekly jobless claims contributed as well to the greenback's uptick.
A report released by payroll processor ADP showed private sector employment in the U.S. spiked by much more than expected in the month of May. ADP said private sector employment soared by 978,000 jobs in May after surging by a downwardly revised 654,000 jobs in April.
Economists had expected private sector employment to increase by 650,000 jobs compared to the addition of 742,000 jobs originally reported for the previous month.
According to data released by the Labor Department, initial jobless claims dipped to 385,000 in the week ended May 29th, a decrease of 20,000 from the previous week's revised level of 405,000. Economists had expected jobless claims to edge down to 395,000 from the 406,000 originally reported for the previous week.
Meanwhile, the Institute for Supply Management released a report showing record growth in service sector activity in the month of May.
The ISM said its services PMI rose to 64.0 in May from 62.7 in April, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 63.0.
The Labor Department is scheduled to release the monthly jobs data on Friday. Economists currently expect the report to show employment jumped by 664,000 jobs in May after climbing by 266,000 jobs in April. The unemployment rate is also expected to dip to 5.9% from 6.1%.
The dollar index climbed to 90.55, gaining about 0.7%. It was last seen at 0.50, up 0.65% from the previous close.
Against the Euro, the dollar strengthened to $1.2130, gaining nearly 0.7%. The euro area private sector growth improved more than initially estimated in May, final data from IHS Markit showed.
The final composite output index rose to 57.1 in May from 53.8 in April. The flash reading was 56.9. The upturn was driven by a noticeable acceleration of growth in services. Services activity grew at the fastest pace in just under three years in May. The final services Purchasing Managers' Index came in at 55.2 in May, up from 50.5 in April and the flash score of 55.1.
The Pound Sterling weakened against the dollar, fetching $1.4108, more than 0.4% less than Wednesday's close of $1.4170. The UK service sector gained further momentum in May on higher spending in response to looser pandemic restrictions, final data from IHS Markit showed.
The Yen slid to 110.29 a dollar, easing from 109.57 a dollar Wednesday evening, after the latest survey from Jibun Bank revealed that the services sector in Japan continued to contract in May, and at a faster pace, with the PMI score coming in at 46.5.
The dollar gained significant ground against the Aussie, firming to US$0.7660 from US$0.7754.
The Swiss franc slid to 0.9036 a dollar from 0.8979, while the Loonie fell to 1.2102 from 1.2035 a dollar.
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