On a day of little volatility, the US dollar received a welcomed boost against the Swissie and yen following a better than expected report by the ADP employer services firm. According to the private sector based report, US employers reduced payrolls by 522,000 jobs in the month of January. The figure does still loom relatively heavy over the world’s largest economy. However, some dollar supporters found solace in the fact that the actual number was better than the 535,000 shortfall estimated by experts. Even better was the fact that the previous month’s figures, the whopping 693,000 loss, was positively revised. The newfound figures now place heavy speculation on possible upside in this Friday’s US employment report. Although anticipation continues to expect a 16-year high unemployment rate, some whispers of a better than expected release are lingering. Further optimism was cast as it was shown that the services sector in the US may be improving. According to the Institute for Supply Management index, activity rose to a reading of 42.9 with the new orders component showing an uptick to 41.6. As a result, US dollar momentum will likely remain intact for now, but vulnerable to a let down as speculators continue to eye potential barriers to the passage of the Obama stimulus plan which is up for a contentious vote today. Should policymakers continue to find difficulties with the $900 billion plan, this will likely quash any interim support for the greenback.

Tags: ADP Employment, Stimulus Plan, US ISM Services

This entry was posted on Wednesday, February 4th, 2009 at 2:06 pm and is filed under Currency Trading, Economic Indicators. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.