The US dollar strengthened and stocks edged lower on Wednesday as concerns about the future path of monetary policy continued to weigh on investors.

The dollar index, a measure of the greenback against a basket of peers, rose 0.1 per cent and was poised for its first monthly gain in two. While the yield on the 10-year Treasury rose 0.7 basis points to 1.573 per cent.

Meanwhile the S&P 500 dipped 0.2 per cent to 2,172.20 — on track to close within 1 per cent of where it began for the 38th straight day. While the Dow Jones Industrial Average declined 0.2 per cent to 18,419.03.

The moves come as the latest report from payroll processor ADP showed that the private sector created 177,000 jobs in August, after an upwardly revised 194,000 increase the previous month. The data added to signs of a tightening labour market and were published ahead of the closely-watched jobs report due on Friday.

“If the ADP turns out to be off the mark and non-farm payrolls increase by 250,000 or more, as they did in both June and July, then a September rate hike would become a real possibility,” Paul Ashworth, economist at Capital Economics, said.

“It is more likely that payrolls will come in below 200,000, however, which would probably persuade the Fed to hold off on the next rate hike until December.”

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