NEW YORK: The dollar rose on Wednesday as investors shrugged off Fitch’s US credit rating downgrade while data showing a larger-than-expected increase in private payrolls in July bolstered the greenback as it suggested further labor market resilience.

Private payrolls rose by 324,000 jobs last month, the ADP National Employment report showed, more than an increase of 189,000 that economists polled by Reuters had forecast.

The US labor market is slowing gradually despite the Federal Reserve having raised interest rates by 525 basis points since March 2022.

The dollar index, a measure of the US currency against six peers, rose 0.745% to a fresh three-week high. The dollar index has gained 3.0% from a 15-month low on July 18.

Fitch on Tuesday downgraded the United States to AA+ from AAA in a move that drew an angry response from the White House and surprised investors, coming despite the resolution two months ago of a debt ceiling crisis.

The yen eased 0.06% to 143.43 per dollar and after earlier being poised to reverse three sessions of losses.

Sterling traded down 0.74% on the day at $1.2682.

The Bank of England sets interest rates on Thursday and the market is uncertain whether it will deliver a 25 or 50 basis point increase from the current 5%.

The Australian dollar fell 1.19% to $0.653, after earlier sliding to its lowest since June at $0.657.