Investing.com - The dollar fell to session lows against the yen on Wednesday, hovering just above 11-week lows after data showed that the U.S. private sector added fewer-than-expected jobs in January, fuelling concerns over the recovery in the labor market.
USD/JPY was down 0.73% to 100.89, holding just above the 11-week lows of 100.74 reached on Tuesday.
The drop in the dollar came after a report showed that ADP non-farm payrolls rose by 175,000 last month, below expectations for an increase of 180,000.
The report fuelled concerns over a slowdown in the U.S. recovery, ahead of Friday’s closely watched government nonfarm payrolls report. Data earlier the week showed that U.S. manufacturing slumped to a seven-month low in January, clouding the outlook for first quarter growth.
Friday’s report is expected to show that jobs growth rebounded in January after unseasonably cold weather in December kept gains down to 74,000.
Elsewhere, EUR/USD was up 0.15% to 1.3538. The euro remained supported after encouraging euro zone private sector data for January offset a report showing a sharp fall in retail sales in the region in December.
The final reading of the euro zone composite output index came in at a two-and-a-half year high of 52.9 in January, slightly lower than the preliminary estimate for 53.2, but up from 52.1 in December.
A separate report showed that euro zone retail sales fell at the fastest rate since May 2011 in December.
The pound was lower against the dollar, with GBP/USD sliding 0.24% to 1.6285.
Sterling remained broadly weaker after data on Wednesday showed that activity in the U.K.’s dominant service sector slowed unexpectedly in January, but growth remained solid, indicating that the economic recovery is on track.
The U.K. services PMI for January came in at seven-month low of 58.3, down from 58.8 in December. Analysts had expected the index to tick up to 59.0.
The dollar moved lower against the Swiss franc, with USD/CHF down 0.18% to 0.9022.
The New Zealand dollar was lower, with NZD/USD down 0.29% to 0.8219. The pair rose to highs of 0.8256 overnight, the strongest since January 29, after data showed that the labor market strengthened in the fourth quarter.
Statistics New Zealand said the number of people employed in the three months to December increased by 1.1% or 24,000, after an additional 28,000 jobs were created in the third quarter. Market expectations had been for an increase of 0.6%.
The unemployment rate fell to 6.0% in the fourth quarter from 6.2% in the previous quarter, in line with market expectations.
The Australian dollar was almost unchanged near three-week highs, with AUD/USD dipping 0.06% to 0.8919. The Aussie held the previous session’s strong gains after the Reserve Bank of Australia shifted its monetary policy stance away from easing rates on Tuesday.
The Canadian dollar was steady against the U.S. dollar, with USD/CAD inching down 0.02% to 1.1077.
In Canada, data showed that building permits issued in December fell by 4.1%. Market expectations had been for an increase of 2.0%.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, slid 0.13% to 81.13.