Dollar Spikes Up After Positive U.S. Data; Jobs Data Awaited

The U.S. dollar moved up against its major counterparts in late Asian deals on Thursday, as positive private sector jobs data and services sector report from the U.S. overnight revived investor bets that the Fed may raise rates by midyear. Traders now await Friday's jobs data for more clues about the economy.

Data from payroll processor ADP showed that U.S. private sector employment remained above 200,000 for the ninth consecutive month in February, with an increase of 212,00 jobs.

The data signaled that the solid trend in U.S labor market is sustaining, boosting hopes that the Fed will initiate an interest rate hike sooner, rather than later.

The ADP figures are considered a key prelude to the official U.S. jobs report, which comes out Friday morning from the Labor Department. Economists predict an addition of 235,000 jobs in February. The jobless rate is expected to decline to 5.6 percent from 5.7 percent in January.

The U.S. service sector activity unexpectedly grew at a slightly faster rate in the month of February, according to a report released by the Institute for Supply Management.

The ISM said its non-manufacturing index inched up to 56.9 in February from 56.7 in January, with a reading above 50 indicating an expansion in service sector activity.

The Federal Reserve's Beige Book report showed that the economy continues to expand at a moderate pace across most regions from early January through mid-February.

Today's weekly U.S. jobless claims and monetary policy decisions by the European Central Bank and the Bank of England are also in focus for further direction.

The greenback that ended yesterday's trading at 119.64 versus the yen advanced to a 2-day high of 119.90. The next possible resistance for the greenback-yen pair is seen around the 120.7 zone.

The greenback firmed up to 1.1025 against the euro, a level unseen since September 2003. If the greenback extends rise, 1.09 is seen as its next resistance level.

The greenback added almost 0.3 percent to 1.5224 against the pound, its highest since February 12. The pair was valued at 1.5263 at Wednesday's close. Extension of bullish trend may take the greenback to a resistance around the 1.51 mark.

The greenback climbed to 0.9662 against the Swiss franc, up from yesterday's closing value of 0.9629. Next key resistance for the greenback may be located around the 0.98 area.

Reversing from an early low of 0.7596 against the NZ dollar, the greenback appreciated to a 2-day high of 0.7533. The greenback is poised to challenge resistance near the 0.74 mark.

The greenback edged up to 1.2447 against the loonie, compared to 1.2423 hit at yesterday's close. On the upside, the greenback may test resistance around the 1.26 zone.

Looking ahead, U.K. Halifax house price index for February is due shortly.

The Bank of England will announce its interest rate decision at 7:00 am ET. Economists expect the bank to retain interest rates unchanged at 0.50 percent and asset purchase target at GBP 375 billion.

The European Central Bank will announce its interest rate decision at 7:45 am ET. Economists expect the bank to retain interest rates unchanged at 0.05 percent.

Following the announcement, central bank President Mario Draghi will hold the customary post-meeting press conference in Cyprus at 8:30 am ET.

In the New York session, U.S. weekly jobless claims for the week ended February 28, factory orders for January and Canada Ivey's PMI for February are slated for release.

At 10:00 am ET, U.S. Federal Reserve Bank of San Francisco President John Williams will deliver a speech about the economic outlook at the Chartered Financial Analysts Society Hawaii 10th Annual Economic Forecast Dinner, in Honolulu.