Dollar Gains vs Yen After Payrolls Data Disappoints

The U.S. dollar pared gains against the yen on Wednesday, following the release of disappointing U.S. private sector payrolls data.

This mornings ADP nonfarm payrolls data showed that the U.S. private sector added 139,000 jobs in February, well below expectations for an increase of 160,000.

And there was more bad news later on when the Institute of Supply Management said its non-manufacturing purchasing manager’s index fell to a 43-month low of 51.6 last month from 54.0 in January. Confounding expectations for a fall to 53.5 in February.

The data caused the dollar to give-up ground against the Japanese yen which suffered in risk-off trading after tensions eased in the standoff between Ukraine and Russia.

USD/JPY ended the session up 0.10% at 102.32, down from a high of 102.55 earlier.

While the euro trimmed losses against the dollar after this mornings data. The single currency couldn’t find any friends this morning, despite data showing that euro zone private sector activity grew more rapidly than initially estimated in February, expanding at the fastest pace since June 2011.

Investors remain wary of this weeks European Central Bank’s meeting on Thursday amid concerns that the bank could tighten monetary policy.

EUR/USD ended the session down 0.03% at 1.3738, up from a low of 1.3707 earlier.

The pound also found support this morning after official data showed that activity in the U.K. service sector dipped in February, but growth remained robust.

GBP/USD ended the session up 0.40% at 1.6731.