By Mark DeCambre, MarketWatch

The dollar on Wednesday regained ground lost in the previous session against its major rivals, rising in the wake of economic data that painted a positive picture of the U.S. economy even if it wasn't rosy enough to guarantee a September hike in interest rates.

A semblance of stability in global stocks after two-days of China-fueled turmoil also provided some support for long bets on the dollar, market participants said.

"Some stability in the stock market put the long dollar bet back on today," said Doug Borthwick head of currencies at Chapdelaine & Co.

Read: U.S. stocks rebound 1% after two-day rout (http://www.marketwatch.com/story/dow-futures-jump-almost-100-points-as-us-stocks-look-set-for-rebound-2015-09-02)

Headlined by a relatively strong reading of private-sector jobs earlier in the morning, economic data is signaling health in the U.S. economy. Employers added 190,000 private-sector jobs (http://www.marketwatch.com/story/private-sector-adds-190000-jobs-in-august-adp-2015-09-02-8911922) in August, a faster pace than the prior month's 177,000 jobs. The report comes ahead of the closely watched nonfarm payrolls report due Friday.

Adding to the updraft for the dollar was a reading of U.S. productivity, which showed that economic growth, measured by business output, rose at its fastest pace in almost two years (http://www.marketwatch.com/story/us-productivity-rises-at-fastest-pace-since-end-of-2013-2015-09-02).

However, a falling unit-labor costs--a measure of the costs of producing one unit of output--fell 1.4% in the second quarter rather than rising 0.5% as forecast. Borthwick said falling unit-labor costs may give the Federal Reserve reason to hold off on raising rates at its two-day policy meeting starting Sept. 16 because it shows inflation may not be rising to the Fed's 2% target.

U.S. central bank officials have said that improvement in employment as well as healthy inflation are measures that will lead to the normalization of interest-rate policy.

The prospect of higher rates would otherwise be a boon for the dollar, but Borthwick noted that participants in a thinly traded market ahead of the Labor Day holiday were more influenced by market stability than the prospect of lower rates for longer.

The dollar gained against the yen to trade at Yen120.12 in late-morning trade, versus Yen120.16 earlier in the morning and Yen120.04 in late-afternoon trade in New York.

The ICE Dollar Index , a measure of the greenback against a basket of six currency rivals, rose to 95.833, or 0.4% higher, versus 95.700 earlier in the morning before the ADP report was released.

Meanwhile, the euro was about 0.6% lower against the dollar at $1.1235. The shared currency had been at 1.1262 before Wednesday's economic data.

The buck's rise comes after a slump in Tuesday's session (http://www.marketwatch.com/storyno-meta-for-guid) amid a global rout in stocks sparked by persistent fretting about the flagging economic performance of China, one of the world's biggest consumers of goods and services.

In other currencies, the British pound shaved off 0.6% to trade at $1.5300 in recent trade.

In addition to Friday's jobs report, currency traders will be keyed in on the Fed's Beige Book, which offers an anecdotal reading of current economic conditions (http://www.federalreserve.gov/monetarypolicy/beigebook/), at 2 p.m. Eastern Time.

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(END) Dow Jones Newswires

September 02, 2015 12:08 ET (16:08 GMT)