Strong ADP Report Did Not Support the US Dollar

Market Reviews

The US dollar weakened, despite firm data on employment. The American ADP report showed job growth in the private sector by 234 thousand in January, compared to the expectation of 183 thousand. Employment cost index increased by 0.6% in the 4th quarter, reaching a consensus.

The euro grew moderately against the dollar, recovering from a 4-day low against the background of statistics for the Eurozone, Germany and France. Inflation in the Eurozone slowed, as expected, in January. The consumer price index was 1.3%, which is in line with expectations, but weaker than 1.4% in December. The inflation continues to be below the European Central Bank's target of 2%.

The unemployment rate in the Eurozone remained stable at the lowest level in 8 years in December. Eurostat data showed that the unemployment rate remained stable with seasonal fluctuations at the level of 8.7%, which is the lowest level since January 2009. The unemployment rate in Germany fell slightly in December. Destatis reported that the unemployment rate slightly decreased to 3.6% in December from 3.7% in November.

The results of the two-day meeting of the US Federal Open Market Committee will be announced today. It should be noted that the current meeting will be held for the last time under the chairmanship of Janet Yellen. It is widely expected, that at the January meeting, the Fed will keep the interest rate unchanged at 1.50%, but the markets are confident that the central bank will raise the rate at a meeting in March.