USD Stronger After ADP Beats Expectations

The dollar strengthened against the euro and yen Wednesday after data from a prominent payrolls-processing firm showed private-sector employment expanded last month at a blistering pace.

Employers added 263,000 private-sector jobs in March, up from a revised 245,000 in February, ADP Inc. reported. That surpassed expectations for 170,000 new jobs, according to a survey of economists conducted by Econoday.

U.S. factories in particular helped contribute to the apparent rise in employment last month, according to a report from the Institute of Supply Management released earlier in the week. The report showed manufacturing-sector employment improved at its strongest pace since June 2011.

Investors are now turning their attention to a report on U.S. service-sector activity, expected at 10 a.m. Eastern on Wednesday. They’ll be paying close attention to an employment subcomponent. If that too surpasses expectations, economists will likely raise their forecasts for Friday’s labor report, said Christian Lawrence, a currency strategist at Rabobank. Minutes from the Fed’s latest policy meeting will also be released in the afternoon.

The dollar has been particularly sensitive to strong economic data in recent weeks, as investors are still trying to gauge exactly how many more rate hikes the Federal Reserve is planning in 2017.

via MarketWatch

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza