US Dollar (USD) Exchange Rate Holds Gain against the Pound (GBP), Euro (EUR) Static before ECB

The US Dollar eased away from recent losses against the Pound and advanced against the Euro and other major peers on Wednesday after a report showed that companies created the largest amount of jobs since 2012.

According to the data compiled by the ADP Research Institute, the number of new jobs created in June smashed forecasts by coming in at 281,000. The figure smashed expectations for a figure of 205,000 and was a large jump higher from May’s figure of 179,000.

The better than forecast data will go some way of altering the dovish stance many economists have taken regarding the world’s largest economy.

Many were disappointed by the weak first quarter GDP data but that was to be expected due to the extreme weather seen in the winter.

The US Dollar could begin a new movement higher if other data released this week follows the improved pattern set by the ADP figures.

“The US ADP survey for June came in at a very strong 281,000 rise, which will no doubt encourage thoughts of a similarly strong payroll figure. This is a marked pick up in the pace of private sector job creation from the May reading of 179,000, and you have to go back to November 2012 to see a similar spike up in the ADP survey,” said Rob Carnell from ING Bank.

The ‘Greenback’ also advanced against the Euro after the single currency was weighed upon by comments made French Prime Minister Manuel Valls. In a newspaper interview Mr Valls said that he wanted the European Central Bank to go further at tomorrow’s ECB policy meeting to weaken the Euro.

Some of the US Dollar’s strength took a knock however after a separate report showed that factory orders in the world’s largest economy declined by 0.5% in May, ending three consecutive months of gains and was worse than the 0.3% drop forecast.

Investors will now be looking to a speech due to be given by Federal Reserve Chairman Janet Yellen later in the session. Tomorrow’s non-farm payrolls data will also be closely watched.

UPDATED 10:00 GMT 03 July, 2014

Before Payrolls, US Dollar (USD) Stronger against Pound (GBP) and Euro (EUR)

Yesterday’s stronger-than-anticipated US ADP employment report saw the US Dollar trim previous gains against several of its most traded currency counterparts.

The ‘Greenback’ had previously been languishing as investors dwelt on the recent, and highly disappointing, US first quarter growth data.

This employment result helped to firm the US economic outlook and pushed the safe-haven asset higher. The US Dollar held these gains overnight.

On Thursday the US Dollar (USD) to Pound (GBP) exchange rate edged 0.15% higher in response to the news that the UK’s services sector didn’t expand by as much as anticipated in June.

With US Non-Farm Payrolls still to come, additional USD/GBP movement is more than likely. A particularly strong improvement in the US employment sector would be well received by investors.