08:35 AM EDT, 06/05/2024 (MT Newswires) -- The US dollar fell against all major currencies during early North American trade on Wednesday after the Automatic Data Processing employment report surprised on the soft side of expectations for May.

EUR/USD pared losses and GBP/USD added to earlier gains when rallying to session highs around 1.0872 and 1.2790 respectively, while USD/JPY and USD/CAD fell further from session highs around 156.34 and 1.3686 respectively.

This was after ADP Inc said private sector employment grew by just 152,000 in May, down from 192,000 in April and below the consensus, which had looked for a 173,000 increase.

While not always the best guide to the official non-farm payrolls report, the data potentially indicates that a softer reading is likely on Friday when the market will be looking for payrolls to rise by 186,000 for May, up from 175,000 in April.

The dollar has shown greater sensitivity to labor data since Fed Chairman Jerome Powell said in early May that an unexpected weakening of the labor market would be one of two scenarios in which interest rates could still be cut within the year.

Major dollar pairs were mixed on Wednesday with the greenback quoted higher against the Japanese yen, Swiss Franc, euro, Swedish krona and Canadian dollar but lower relative to pound sterling, the Australian dollar and New Zealand dollar.