As we come to the end of the week and approach the biggest trading day of the month, aka the Non-farm payroll (NFP) release in less than 24 hours, investors seem to be pricing in a stronger US dollar ahead of strong expectations for the US economy. As a result, the Euro has fallen to its lowest since October 2019.
The EUR, which was trading steadily at the 1.10000 mark for the past two days, is now averaging 1.09775 after falling to a 4-month low of 1.09660, following the release of another US national employment report, the ADP.
ADP, which stands for Automatic Data Processing, is a research institute which releases a monthly data report showing the employment situation in the US for the previous month. Similar to the NFP, it also measures the number of jobs in the given month, but only for private sector jobs. While the NFP measures the total number of jobs, in both public and private sectors. Therefore, it is usually seen as a precursor for the NFP, and a good indicator of how the bigger report will turn out.
This month’s ADP report saw the total number of private sector jobs at 291,000 in January, a significant increase from the previous month of 199,000. This is the largest increase in 4 years, and was well above forecasts.
Today’s analysis on the Euro was done by Mr Anish Lal here at BlackBull Markets, who had this to say:
“The Euro continues to feel the pressure, trading near a 5-month low, as ominous domestic data carries the bears lower. Meanwhile, positive Jobs data from the Private sector has helped equities and the US dollar to remain bid, with a continuation of the trend putting prices sub 1.0950 in play on the Euro vs US dollar.”