Dollar Trickles Higher on Stronger ADP – IIC Research
By: Ansar Anis Bhesania,
Ismail Iqbal Commodities (Pvt.) Ltd.
The U.S. dollar traded higher or held steady against all of the major currencies. With less than 48 hours to go before the non-farm payrolls report, investors are buying dollars slowly in the hopes that Friday’s jobs number will be strong.
According to private payroll provider ADP, U.S. companies added 191k jobs in the month of March. While this was less than economists expected (the forecast was 195k), the miss was small and job growth the previous month was revised sharply higher to 178k from 139k. Based on this release, the labour market continued to improve in the month of March, which will help payrolls meet its targeted increase of 200k.
There is one more key labour market report scheduled for release before payrolls and that is the non-manufacturing ISM index. Historically changes in the employment component of service sector ISM can have a strong correlation with non-farm payrolls but it is far from perfect because it failed to accurately predict the pickup in job growth last month. Nonetheless, it is a report that investors watch closely.
Fed Presidents Bullard and Lockhart also spoke this morning and while neither gentleman are voting members of the FOMC this year their views couldn’t be any more different. Bullard expects interest rates to rise in the first quarter of 2015 while Lockhart expects the first rate hike in the second half of that year.