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USD Jumps After Much Better Than Expected March ADP Payrolls

USD Jumps After Much Better Than Expected March ADP Payrolls

Nick Cawley, Senior Strategist

Talking Points

- US ADP sees strong jobs growth in March, February’s number revised sharply lower.

- Attention turns to the FOMC minutes later in the session.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for next week on the DailyFX Webinar Calendar.

Private sector, nonfarm employment increased by 263k jobs from February to March according to the latest ADP National Employment Report, beating expectations of a 185k increase. However the February blowout reading of 298k was revised sharply lower to 245k. Small businesses (1-49 employees) added 118k new roles, medium-sized businesses (50-499 employees) added 100k of new jobs while large businesses (500+) added 45k new positions.

“The U.S. labor market finished the first quarter on a strong note,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Consumer dependent industries including healthcare, leisure and hospitality, and trade had strong growth during the month.”

Today's release should see anaysts upgrading their expectations for Friday's US Nonfarm Payrolls from a current 180k.

The markets will also be looking forward to the release later today of the minutes of the March 14-15 FOMC meeting, when the central bank raised rates by 0.25%. Investors will especially looking for any clues as to how, and when, the Fed will start reducing its balance sheet, currently standing at around $4.5 trillion. Recent hawkish Fed talk suggests that policy makers want to see at least two more rate hikes until any tapering, while the more dovish say that tapering should be discussed before any further rate hikes.

The USD perked up on the release as the release highlights the current strong jobs market.

Chart: USD Dollar Index (DXY) Five-Minute Timeframe (April 5, 2017).

Chart by IG

--- Written by Nick Cawley, Analyst

To contact Nick, email him at Nicholas.cawley@ig.com

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