Dollar Gains on Robust ADP Report
The release of private sector labor data from U.S.-based ADP which showed that 281,000 new jobs were added in July helped to lift the U.S. Dollar and kept up the bullish momentum in the Asian trading session. Analysts had been expecting 200,000 new jobs, which would have been an increase from May’s 179,000, and the upbeat data which is generally viewed as a good indicator of the U.S. government’s official labor report due out tomorrow could raise expectations of a more robust number than the 213,000 jobs that had been forecast earlier. Recent bullish data supports the view that the U.S. economy is finally steadily recovering and could result in the Federal Reserve Bank raising interest rates in the mid-term.
As reported at 11:59 a.m. (JST) in Tokyo, the U.S. Dollar Index edged away from this week’s 8-week low and was recently trading at 79.956 .DXY. The USD/JPY also traded higher, moving away from a recent 6-week trough; recently the pair was trading at 101.78 Yen. Likewise, the dollar pulled ahead of its European counterpart with the EUR/USD trading at $1.3657.
Markets Look Ahead to NFP and Central Bank Decisions
Besides the Non-farms Payroll report which is due out tomorrow, markets will watch for any changes to monetary policy from the Bank of Japan or the Bank of England. Analysts anticipate that BOJ is likely to maintain the status quo, while the BoE’s likely direction is less certain given the recently change of bias by Mark Carney, the central bank governor.