Wednesday (August 31st), US ADP employment increased by 177,000 jobs in August, proving dollar and US economy positively and non-dollar currencies negatively. US labor market remains robust and employment grew in many industries. Specifically, professional/business services added 53,000 jobs. Financial activities grew by 15,000 jobs, better than July’s 11,000. Trade/transportation/utilities have a rise of 26,000. Labor market growth remained steady in August The US will achieve full employment soon if continues to expand at this pace.
US non-farm payrolls in August will be released tomorrow. August jobs report may disappoint markets as non-farm employment increased sharply in the previous two months (292,000 in June and 255,000 in July). US conference board’s consumer confidence index rose to 101.1, higher than July’s 96.7, and employment index reached to its highest level since 2008. Market expectations keeping rising, indicating steady growth of US labor market.
Formax analyst forecast ADP employment data would beat expectation by an increase of 177,000. As the leading indicator of non-farm payroll, if initial jobless claims and continuing claims that will be released tonight also perform well, August non-farm data would have a larger chance to shine.
After technical analysis, we predict that the U.S. dollar would remain bullish in recent period. After retraced 94 line and broke several major resistance lines, if the U.S. dollar continues to achieve gains in the second week, then we can confirm the dollar’s upward trend. But if it fails, it would be in turbulence pattern for a period of time. From monthly line, the dollar closed at gains in August, indicating a larger buy in volume at present.
Therefore, no matter from news or technical side, an indicator is needed, the result is about to come in tomorrow night. As an investor, we should wait patiently, and cope with shifting events by sticking to fundamental principles.