The U.S. dollar gained against its major rivals on Wednesday after treasury yields rose amid inflation worries, and data showed stronger than expected private sector employment growth in the U.S.
The yields on U.S. long-term Treasury notes climbed higher as inflation worries rose and data showed a stronger than expected growth in private sector jobs in September.
A report from payroll processor ADP showed private sector employment jumped by 568,000 jobs in September after rising by a downwardly revised 340,000 jobs in August.
Economists had expected private sector employment to climb by 428,000 jobs compared to the addition of 374,000 jobs originally reported for the previous month.
Meanwhile, Senate Minority Leader Mitch McConnell said in a statement that Republicans would allow Democrats to “use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December.”
The offer from McConnell comes as lawmakers are facing an October 18th deadline to raise the debt limit and avoid a potential default.
Meanwhile, investors looked ahead to the upcoming U.S. jobs data, due on Friday. The data is expected to show a continued improvement in the labor market.
Economists forecast a rise of 488,000 jobs in the month of September, while the jobless rate is seen falling to 5.1% from 5.2%.
The nonfarm payrolls data is seen as crucial in influencing the timing of the start of winding down the QE program.
The dollar index climbed to 94.45 in the European session, and despite paring some gains subsequently, remains firmly up at 94.22, about 0.24 points or 0.26% over its previous close.
Against the Euro, the dollar firmed to $1.1558 from $1.1599.
The Pound Sterling drifted down against the dollar, fetching $1.3590 a unit, compared to $1.3627 Tuesday evening.
Against the Yen, the dollar shed marginal ground, dropping to 111.42 yen from 111.47.
Against the Aussie, the dollar strengthened to 0.7277 from 0.7291.
The Swiss franc gained marginally against the dollar, advancing to 0.9273, while the Loonie declined marginally to $1.2592 a dollar.