The U.S. dollar drifted lower Wednesday morning on weak economic data, but recovered swiftly and gained in strength as the session progressed.
In U.S. economic news, a report released by payroll processor ADP showed private sector employment rose by 145,000 jobs in March after climbing by an upwardly revised 261,000 jobs in February.
Economists had expected private sector employment to advance by 200,000 jobs compared to the addition of 242,000 jobs originally reported for the previous month.
A report released by the Institute for Supply Management showed growth in U.S. service sector activity slowed by much more than expected in the month of March.
The ISM said its services PMI slid to 51.2 in March from 55.1 in February. Economists had expected the index to show a much more modest decrease to 54.5.
The dollar index dropped to 101.42 after data showed a slowdown in U.S. private sector job growth, and a much slower pace of growth in service sector activity.
However, the index recovered and climbed to 101.99 later on in the session, gaining more than 0.4%.
Against the Euro, the dollar firmed to 1.0902 from 1.0957, and strengthened to 1.2456 against Pound Sterling, gaining from 1.2500.
Against the Japanese currency, the dollar weakened to 131.40 yen from 131.72 yen.
The dollar firmed to 0.6718 against the Aussie, gaining about 0.5%. Against Swiss franc, the dollar gained marginally at CHF 0.9067.
The Loonie eased to 1.3461 a dollar, down marginally from the previous close of 1.3445.
