U.S. Dollar Seeing Modest Strength Following Upbeat Service Sector Data

After trending lower over the past few days, the value of the U.S. dollar has shown a modest move back to the upside during trading on Wednesday.

The U.S. dollar index has fluctuated over the course of the day but is currently up 0.19 points or 0.2 percent at 104.30.

The greenback is trading at 156.14 yen compared to the 154.88 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0869 compared to yesterday's $1.0879.

The uptick by the dollar comes following the release of a report from the Institute for Supply Management showing service sector activity returned to growth in the month of May after contracting in April for the first time since December 2022

The ISM said its services PMI jumped to 53.8 in May from 49.4 in April, with a reading above 50 indicating growth in the sector. Economists had expected the index to inch up to 50.8.

With the much bigger than expected increase, the services PMI reached its highest level since hitting 54.1 in August 2023.

The buck had moved to the downside earlier in the session as payroll processor ADP released a report showing private sector job growth in the U.S. slowed by more than expected in the month of May.

ADP said private sector employment climbed by 152,000 jobs in May after jumping by a downwardly revised 188,000 jobs in April.

Economists had expected private sector employment to increase by 173,000 jobs compared to the addition of 192,000 jobs originally reported for the previous month.