Wednesday, 1 Sep 2010

Forex News: USD Lower after ADP Shows 10K Jobs Cut

Today's release from Automatic Data Processing Inc.'s (ADP) employment estimate has shown that the US private sector cut 10,000 jobs this past month. The figure serves to highlight the current general trend of the US economy, which has been showing signs that the economic recovery is undergoing a modest slow-down.

In response to the worse-than-expected figures, the US dollar has taken a minor dip against a basket of its primary currency rivals. The EUR/USD has risen from 1.2660 to as high as 1.2830 in today's trading. The USD/JPY also plummeted towards 83.80. Fueling this burst of risk appetite was also a series of news events this morning which showed positive growth in China and Australia.

Ominously, this depressing result for the US private sector may be outdone by Friday's NFP report. ADP's figure does not include hirings and firings from the federal government for the 2010 Census, meaning an addition of those figures will only serve to show an even deeper decline in US employment for the month of August. This no doubt is putting additional downward pressure on the greenback.