BRUSSELS (dpa-AFX) - The U.S. dollar spiked up to a multi-week high against the Japanese yen in the European session on Thursday, as stronger than expected ADP private payrolls data supported hopes that the Federal Reserve will refrain from aggressive easing when it meets this month.
Data from payroll processor ADP showed that U.S. private sector employment jumped much more than expected in the month of August.
The report said private sector employment surged up by 195,000 jobs in August after climbing by a downwardly revised 142,000 jobs in July.
Economists had expected employment to increase by about 149,000 jobs compared to the addition of 156,000 jobs originally reported for the previous month.
The ADP data is seen as a good guide to much anticipated nonfarm payrolls data, which will be released on Friday.
The report is expected to show employment climbed by about 160,000 jobs in August following a 164,000 gain in July. The unemployment rate is expected to hold at 3.7 percent.
The Institute for Supply Management's non-manufacturing index for August and factory orders for July will be featured shortly.
Market participants are anticipating a rate cut of 25 basis points by the Fed when it meets on September 17-18.
Investors cheered developments on the trade front, after the United States and China have agreed to hold high level talks in Washington early next month in a bid to ease tensions in their rapidly escalating trade war.
The currency was higher against its most major opponents in the previous session, as news of the U.S. and China resuming trade talks bolstered sentiment.
The greenback was 0.5 percent stronger at over a 3-week high of 106.93 against the yen, compared to yesterday's closing value of 106.37. Next immediate resistance for the greenback is seen around the 111.00 level.
The greenback held steady against the franc, after having recovered from a low of 0.9799 seen at 5:00 pm ET. At yesterday's close, the pair was was worth 0.9806.
The greenback remained lower against the euro, holding near a weekly low of 1.1067 set at 8:00 am ET. The pair was worth 1.1036 when it closed deals on Wednesday.
Data from Destatis showed that Germany's factory orders decreased more-than-expected in July.
Factory orders decreased 2.7 percent over the previous month in July, in contrast to an increase of revised 2.7 percent seen in June.
Having dropped to more than a 5-week low of 1.2354 against the pound at 7:15 am ET, the greenback held steady in subsequent trading. The greenback was trading at 1.2252 per pound at yesterday's close.
The U.S. factory orders for July and ISM non-manufacturing composite index for August will be released at 10:00 am ET.
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