The ADP figure is crucial for the US economy and will be released at 1:15 pm GMT
The euro is holding above $1.04 against the dollar as investors await the release of key US private sector employment data later today. The figures, due at 1:15 PM GMT, will provide a crucial steer on the health of the labour market ahead of Friday's official non-farm payrolls (NFP) report.
Market Expectations
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Create account Try a demo Download mobile app Download mobile appThe Automatic Data Processing (ADP) National Employment Report is expected to show a robust rebound in job creation for January, with economists forecasting an increase of 150,000. This follows a weaker-than-anticipated reading in December.
ADP as a NFP Precursor
While the ADP report is closely watched as a bellwether for the NFP, its track record has been mixed in recent months. The two reports diverged sharply in November, raising questions about the ADP's reliability. However, strong NFP data for December have reinforced expectations of continued expansion in the US labour market.
Broader Economic Context
The US labour market remains a key focus for the Federal Reserve, which recently tightened monetary policy in response to persistent inflation concerns. While the NFP has pointed to robust job growth, other indicators, such as the Job Openings and Labour Turnover Survey (JOLTS), have signalled a potential softening in demand for workers.
EURUSD Outlook
The euro has recovered from recent lows after the Trump administration's threat of tariffs on EU goods briefly pushed the currency pair below $1.02. However, the risk of a trade war remains a key concern for investors, who are also keeping a close eye on the US economic outlook.
A stronger-than-expected ADP report, particularly one exceeding 180,000 jobs, could bolster the dollar and put downward pressure on the euro. Conversely, a weaker reading below 150,000 could trigger a rally in the single currency.
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