U.S. Dollar Rebounds After Solid ADP Data

The U.S. dollar erased some of its losses against its most major counterparts in the European session on Wednesday, after a data showed that the nation's private sector employment increased much more than expected in April.

Data from payroll processor ADP showed that private sector employment surged by 296,000 jobs in April after climbing by a revised 142,000 jobs in March.

Economists had expected private sector employment to advance by 148,000 jobs compared to the addition of 145,000 jobs originally reported for the previous month.

However, gains were limited as investors looked ahead to the Federal Reserve's rate decision for signals on pause in the rate hike after the widely expected 25-basis point move later in the day.

The Fed will announce its rate decision at 2 pm ET, with economists expecting a rate hike of 25 basis points for a third consecutive meeting.

All eyes are on Fed chief Jerome Powell's news conference for more clues about the policy outlook.

The greenback recovered to 1.2485 against the pound, 1.1021 against the euro and 0.8906 against the franc, off its early 2-day low of 1.2533, 6-day low of 1.1046 and a 1-week low of 0.8871, respectively. The greenback may find resistance around 1.21 against the pound, 1.07 against the euro and 0.92 against the franc.

The greenback was up against the loonie, at a 5-day high of 1.3639. Should the currency strengthens further, it is likely to test resistance around the 1.38 level.

The greenback rebounded to 0.6649 against the aussie and 0.6217 against the kiwi, from an early low of 0.6676 and near a 3-week low of 0.6249, respectively. Next immediate resistance for the currency is seen around 0.63 against the aussie and 0.61 against the kiwi.

In contrast, the greenback resumed decline against the yen, touching a 5-day low of 135.32. If the greenback slides again, it may find support around the 129.00 area.