Dollar Dips on Surprise Payroll Contraction as Services Sector Remains Strong

The US dollar weakened on Wednesday after a surprise contraction in private payrolls for January, as reported by ADP National Employment. The greenback fell 0.3% to 104.20 against a basket of major currencies.

The ADP report showed a decline of 74,000 jobs in January, marking the first decrease since early 2024. This was a sharp reversal from the downwardly revised 76,000 jobs added in December.

Job losses were concentrated in the goods-producing sector, while the service-providing side of the economy continued to add positions. The construction industry shed 26,000 jobs, and manufacturing lost 13,000. The information sector also saw a notable decline of 30,000 positions.