THE TAKEAWAY: U.S. ADP employment change came in much better than forecast > More job creations in service sector >U.S. dollar declines versus its major peers
The monthly ADP National Employment report showed that U.S. companies hired 206 thousand workers more in November, the largest job creation in private sector this year. The reading beats consensus forecast from Bloomberg survey as forty-one economists predicted an increase of merely 130 thousand, with projections ranging from an advance of 95 thousand to 200 thousand. October figure was revised upward to a gain of 130 thousand from 110 thousand. The gain somewhat help bolster the stagnating labor market. As investors consider the ADP employment change a precursor to the non-farm payrolls number, a better-than-forecast figure today sends signal that non-farm payrolls reading released this Friday might exceed expectations as well.
U.S. Monthly ADP Employment Change: March 2010 to Present
Prepared by Trang Nguyen
Going in to the shopping season holiday, almost private firms increase their payrolls, led by gain in service- producing sector. Service-producers generated 178 thousand jobs, following 130 thousand jobs added in October. Also, employment in both manufacturing and good-producing sectors improved considerably in November, more than offsetting the decline in the previous month. Factories for the first time in four months added 7 thousand new workers. Good producers hired 28 thousand workers more after failing to add jobs in October. In terms of size-based companies, small firms registered for the biggest gain of 110 thousand. Likewise, medium firms employed 84 thousand employees more, well above 60 thousand new hires in October. Large firms increased more 12 thousand payrolls, fourth times the number of jobs previously added.
AUD/USD 1-minute Chart: November 30, 2011
Charts created using Strategy Trader– Prepared by Trang Nguyen
Market surged at the beginning of the North American trading session today as the world’s central banks astonishingly announced a joint intervention to lower swap rate. Federal Reserve, European Central Bank, Bank of Japan, Bank of England, Swiss National Bank and Bank of Canada reduce swap rates by 50 basis points at 8:00 Eastern Time. The central banks’ announcement made waves throughout global currency markets and the U.S. dollar is the biggest loser when traders digest the move. The greenback dramatically slid versus most of its major peers. As can be seen from 1-minute AUDUSD chart above, the currency pair abruptly hiked 280 basis points from 1.0050 to 1.0330 following the move. Despite the ADP employment change reported at 8:15 Eastern Time was much better than forecast, the news did nothing to offset the effect of central banks’ coordinated intervention. Foreign exchange crowd continued to be bearish on the greenback forty-five minutes later. The Relative Strength Indicator crossing above the 70-level twice indicated that currency traders was massive selling the dollar in favor of the aussie. At the time this report was written, the aussie trades at 1.0284 U.S. dollars.
--- Written by Trang Nguyen, DailyFX Research Team for DailyFX.com
To contact Trang, email tnguyen@dailyfx.com
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