US ADP Employment Beats Estimates Ahead of FOMC
- ADP Employment Change in April exceeded forecasts coming in at 177K versus 175K estimated.
- The strong employment data unlikely to impact FOMC meeting.
May has started out with a busy week on the economic calendar with US ADP Employment Change being released ahead of FOMC, later today, and US Nonfarm Payrolls later this week. While traders are looking ahead to the Fed’s rate decision, US ADP Employment change exceeded forecasts in April with 177k jobs created versus 175k estimated. As the US labor market approaches full-employment April’s figure came in significantly less than the month prior with 255k jobs created.
When considering the FOMC meeting later today, this data is favorable but is not likely to change the 95% chance that the Fed will hold rates, according to CME’s FedWatch tool. As the labor markets tightens the Fed will shift attention towards the missing component in the US economy which is inflation. After a lackluster Personal Consumption Expenditure print earlier this week, the Fed is likely to address their projections and assumption on the absence of inflation.
For coverage ahead of today’s FOMC meeting please see, Senior Currency Strategist Christopher Vecchio’s, Preview for May FOMC Meeting and Trade Setups in USD-pairs.
Chart 1: DXY 15-minute Chart (May 3, 2017 Intraday)
Immediately following the data, the US Dollar Index rose slightly. As expected, employment change didn’t garner a major reaction. Following the release of the data the US Dollar reversed towards its intraday high at 99.13. At the time this report was written, the pair was trading at 99.07.
--- Written by Dylan Jusino, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.