US ADP Employment Report Has No Support to the Dollar

Market Reviews

The British pound, Swiss franc and Japanese yen are the strongest ones. US dollar fell after mixed job data and awaiting tomorrow’s non-farm payroll report. Euro and commodity currencies are trading as the weakest ones.

The Swiss franc rose against the US dollar, gaining support from Swiss GDP data, that exceeded forecasts. Swiss GDP grew faster than expected by 0.7% qoq in Q2, versus expectation of 0.5% qoq. The government also raised growth forecast for this year. The government projected Swiss GDP to grow 2.4% in 2018, comparing to 1.6% in 2017.

Global shares were trading mixed. FTSE lost 0.21%, DAX rose by 0.12%, CAC was up 0.27%. Earlier today, Japanese Nikkei dropped by 0.41%, Hong Kong HSI was down 0.99%. China Shanghai SSE fell by 0.47% at 2691.59, below 2700 handle. Singapore Strait Times dropped by 0.27%.

US ADP employment report showed 163k growth in private sector jobs in August, below expectation of 188k. US nonfarm productivity was finalized at 2.9% in Q2, unit labor cost at -1.0%. US initial jobless claims fell by 10k to 203k in the week ended September 1, well below expectation of 214k. The indicator marked the lowest level since 1969. Continuing claims dropped -3k to 1.707m in the week ended August 25.

German industrial orders unexpectedly fell in July. The Destatis reported, that production orders fell by 0.9% mom in July after a more significant decline by 3.9% in June (revised from -4%). Economists predicted an increase in the figure by 1.8%. The main driver was a decrease in foreign orders, which fell 3.4% from June to July. Orders for German goods from outside the euro area were down 4.0%. While overseas orders dipped, German domestic orders increased by 2.4%.

The Ifo Institute for Economic Research has raised its growth forecast in 2018 for the German economy to 1.9% from 1.8% earlier, citing higher-than-expected productivity in the first half. Ifo also predicts growth rates of gross domestic product of 1.9% in 2019 and 1.7% in 2020.