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Disappointing October ADP Jobs and September CPI Don't Phase Dollar

Disappointing October ADP Jobs and September CPI Don't Phase Dollar

Christopher Vecchio, CFA, Senior Strategist

Talking Points:

- Second weakest ADP report of 2013; +124.3K in April.

- Second lowest CPI reading of 2013; +1.1% y/y in April.

- US Dollar initially lower, but steadies versus Ausstralian Dollar

The US Dollar has seen a bout of volatility this morning amid two important data releases that offer a bleak picture of the US economy. The private sector tracking report of US labor market, the ADP Employment Change report, showed that jobs growth slowed further as the 4Q’13 began, underscoring fears that next week’s October NFP report will erode more than the September NFP report.

The inflation outlook for the US doesn’t look much better either. The Consumer Price Index slowed to a 2013 low, while core inflation – stripped of food and energy prices – may have peaked in the near-term with the index pulling back from the Fed’s +2% yearly target.

Here’s the data:

- ADP Employment Change (OCT): +130K versus +150K expected from +145K (revised lower from +166K).

- Consumer Price Index (SEP): +0.2% as expected, from +0.1% (m/m); +1.2% as expected, from +1.5% (y/y).

- CPI – Core (SEP): +0.1% versus +0.2% expected, from +0.1% (m/m); +1.7% versus +1.8% expected, from +1.8% (y/y).

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) 1-minute Chart: October 30, 2013

Disappointing_October_ADP_Jobs_and_September_CPI_Dont_Phase_Dollar_body_x0000_i1027.png, Disappointing October ADP Jobs and September CPI Don't Phase Dollar

Charts Created using Marketscopeprepared by Christopher Vecchio

Nevertheless, the US Dollar is trading slightly higher after all of the data after seeing both positive and negative swings against its major counterparts. The USDOLLAR Index best captures what was seen versus the Australian Dollar, the British Pound, the Euro, and the Japanese Yen. The index declined from 10456 ahead of the ADP jobs report at 08:15 EDT/12:15 GMT, but was seen trading at 10459 at the time this report was written within an hour of its release.

--- Written by Christopher Vecchio, Currency Analyst

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