Forex: US ADP Employment Change Beats Estimates in January; USDJPY Jumps before Q4 GDP
THE TAKEAWAY: [US ADP employment change came in better than expected ] > [Add signs that US labor market is recovering with solid job gains] > [USD/JPY Bullish]
The monthly ADP National Employment report showed that U.S. companies hired 192 thousand workers more in January, the largest increase in 11 months. The reading exceeds median forecast from Bloomberg survey of38 economists pulled by Bloomberg News that called for an increase of only 165 thousand, with projections ranging from an advance of 120 thousand to 235 thousand. December figure was revised downward to a gain of 185 thousand from 215 thousand.
As the ADP employment change is considered a precursor to the non-farm payrolls number, a better-than-forecast figure today raised hope that non-farm payrolls reading released this Friday might exceed expectations as well. Non-farm payroll figure was predicted to climb by 161 thousand in Januaryat the same pace as in December.
Chart created using Market Scope – Prepared by Renee Mu
The U.S. dollar strengthened against the Japanese yen following data release. As can be seen from the one-minute chart above, the USD/JPY pair rose to 91.31 yen in the minute preceding the report but then dropped sharply due to the disappointed US Q4 GDP coming out later. At the time this report was written, the USD/JPY pair was trading at 91.07 yen.
--- Written by Renee Mu DailyFX Research
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