U.S. Dollar Falls As ADP Private Sector Job Growth Slows, European Stocks Rebound

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The U.S. dollar depreciated against its major counterparts in the European session on Thursday, as the nation's private sector employment rose much less than expected in May and amid improved risk sentiment following a drop in oil prices on signals that Saudi Arabia could boost output if Russia's production drops due to Western sanctions.

Data from the payroll processor ADP showed that private sector employment climbed by 128,000 jobs in May after jumping by a downwardly revised 202,000 jobs in April.

Economists had expected private sector employment to surge by 300,000 jobs compared to the addition of 247,000 jobs originally reported for the previous month.

Crude oil fell after the Financial Times reported that Saudi Arabia could raise its oil production in the event of a sharp drop in Russia's output.

The U.S. jobs data is due on Friday, with economists expecting a gain of 325,000 jobs in May following an increase of 428,000 jobs in the previous month. The unemployment rate is expected to fall to 3.5 percent from 3.6 percent.

In economic news, data from the Labor Department showed that first-time claims for U.S. unemployment benefits declined unexpectedly in the week ended May 28.

The report showed initial jobless claims fell to 200,000, a decrease of 11,000 from the previous week's revised level of 211,000. Economists had expected jobless claims to come in unchanged compared to the 210,000 originally reported for the previous week.

The greenback held steady against its key counterparts in the Asian session, except the franc.

The greenback dropped to 129.51 against the yen, from a fresh 3-week high of 130.24 seen at 7:15 pm ET. The pair had closed Wednesday's deals at 130.08. The greenback is seen facing support around the 126.5 level.

The greenback reached as low as 1.0716 against the euro, down from Wednesday's close of 1.0645. Should the greenback dips further, 1.09 is possibly seen as its next support level.

Data from Eurostat showed that Eurozone producer price inflation accelerated further to a new record high in April.

Producer prices advanced 37.2 percent on a yearly basis in April, faster than the 36.9 percent rise in March. Nonetheless, this was slower than the expected rate of 38.5 percent.

The greenback was down against the pound, at 1.2571. The pound-greenback pair had ended yesterday's trading session at 1.2484. Further drop in the currency may challenge support around the 1.29 level.

The greenback touched a 4-week low of 0.7233 against the aussie, following a 6-day high of 0.7141 it set at 1:30 am ET. The greenback was worth 0.7172 per aussie at Wednesday's New York session close. Immediate support for the greenback is likely located around the 0.76 level.

After a rise to a 1-week high of 0.6460 at 1:30 am ET, the greenback slipped to a 2-day low of 0.6544 against the kiwi. At Wednesday's close, the pair was valued at 0.6478. If the greenback continues its fall, 0.68 is possibly seen as its next support level.

The greenback dipped to near a 6-week low of 1.2604 against the loonie, down from a 2-day high of 1.2686 it recorded at 1:30 am ET. The greenback traded at 1.2657 against the loonie at yesterday's close. The greenback may locate support around the 1.24 level.

The greenback held steady against the franc, after having dropped to a 2-day low of 0.9575 at 2:30 am ET. At yesterday's trading close, the pair was quoted at 0.9621.

Data from the Federal Statistical Office showed that Switzerland's consumer price inflation rose to the highest level since September 2008.

Consumer prices rose 2.9 percent year-on-year in May, following a 2.5 percent increase April. Economists had expected a 2.6 percent inflation.

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