© Reuters.  Dollar hits day's highs after Upbeat ADP Data© Reuters. Dollar hits day’s highs after Upbeat ADP Data

Investing.com – The dollar extended gains against a basket of the other major currencies on Wednesday after robust U.S. private sector hiring data bolstered the outlook for Friday’s nonfarm payrolls report.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.23% to 94.67 by 08:37 AM ET (12:37 PM GMT), re-approaching Friday’s three month peak of 95.06.

U.S. private employers added 235,000 jobs in October, well above economists’ expectations, a report by a payrolls processor ADP showed.

The robust data underlined the view that the economy is gaining momentum ahead of Friday’s government jobs report for October.

Meanwhile, investors were awaiting the Federal Reserve’s policy statement at the conclusion of its two-day policy meeting later Wednesday for fresh clues on future tightening.

The Fed was expected to leave interest rates unchanged but investors were waiting for any indications that it will resume raising rates next month as expected, and the timing of any rate hikes in 2018.

Traders were also awaiting President Donald Trump’s announcement about the next head of the U.S. central bank. Recent reports have indicated that Trump is likely to appoint Fed Governor Jerome Powell, who is viewed as more dovish than other candidates.

The dollar was higher against the yen, with USD/JPY rising 0.48% to 114.18, closing in on last week’s more than three month high of 114.44.

The euro fell to the days lows, with EUR/USD down 0.23% to 1.1618, not far from the three-month low of 1.1573 hit late last week after the European Central Bank said it will extend its bond purchases into September 2018.

Sterling eased back from two-week highs, with GBP/USD last at 1.3294.

The pound was boosted earlier after data showing that the UK manufacturing sector grew at a faster than expected pace in October brightened the outlook for fourth quarter growth.

Demand for sterling was also underpinned by expectations that the Bank of England will raise interest rates for the first time in almost a decade on Thursday.

sponsoredArticle = ‘div-gpt-ad-1466339494851-0’;