ADP Employment Change Preview: USD needs more jobs
|Employment change for July private payroll is estimated to be 950,000 workers. Dollar levels are closely affected by the condition of the US labor market, therefore, the greenback is not expected to recover from its weakness triggered by the new Fed inflation policy until the US population is back to work, FXtreet’s analyst Joseph Trevisani briefs.
Key quotes
“Private payrolls from Automatic Data Processing are projected to add 950,000 new employees in August, far more than the 167,000 reported in July.”
“Dollar weakness was initially predicated on the economic drag anticipated from the second wave of the Covid-19 infections in several large US states. With new cases, hospitalization and fatalities on the decline across the country the economic impact seems to be minor.”
“The Federal Reserve’s new inflation averaging policy will have no material effect on the actual fed funds rate but it has given the market a new reason to short the dollar. In June the rate was projected by the Fed to be unchanged through the end of 2022.”
“Until the US economy produces a string of good results, particularly from the labor market, it will be difficult to replace that double scenario against the dollar.”
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