ADP Non-Farm Payrolls Beat With 205K – USD Cannot Recover

Better than expected job gains in the private sector: ADP showed 205K jobs gained in January and an upwards revision for December: 267K against 257K originally reported.

The US dollar is recovering some of the losses with EUR/USD slipping to 1.0930, GBP/USD at 1.4514, USD/JPY above 119.40, AUD/USD at 0.7055, USD/CAD at 1.3935 and NZD/USD above 0.66.Update: after the initial strength, the greenback is resuming its falls.

Automated Data Processing (ADP) was expected to report a a gain of around 195K jobs in January 2016, after a strong 257K in December. In recent months, there has been a better correlation between the ADP report for the private sector and the official Non-Farm Payrolls report on Friday.

Towards the publication, the dollar has been weaker across the board, with EUR/USD rising to 1.0940.

Earlier this week, the employment component of the ISM Manufacturing PMI took a dive to 45.9 points, deep in contraction territory. This is an ominous sign for the NFP, despite the fact that the sector is only a small part of the economy.

Later today we will get the ISM Non-Manufacturing PMI – a report for the services sector, that should be better and provide a better picture, alongside the ADP publication.