The US dollar was soft versus riskier commodity currencies but stood ground against majors. The greenback was especially strong against European majors such as the euro, the Great Britain pound, and the Swiss franc. The main hurdle for the US currency today was the disappointing employment report from Automatic Data Processing.
The ADP report showed a growth of employment by 102,000 in June, whereas markets were counting on an increase by 140,000. The disappointing reading followed the May’s disastrous figure of 41,000 (and that is after a positive revision!).
The data led to concerns that nonfarm payrolls released on Friday may also miss expectations. While the two reports does not always correlate, last time they were more or less in sync with each other. For now, markets count on an increase of nonfarm employment by 164,000. Analysts also expect the unemployment rate to stay unchanged at 3.6% and wage inflation to accelerate slightly from 0.2% to 0.3%.
Trading will be lighter than usual tomorrow due to the Independence Day holiday in the United States.
EUR/USD declined from 1.1285 to 1.1277 as of 18:08 GMT today, retreating from the daily maximum of 1.1311. GBP/USD dropped from 1.2592 to 1.2576, touching the minimum of 1.2556 intraday. USD/CHF went up from 0.9862 to 0.9869, rebounding from the session low of 0.9834.
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US Dollar Stands Ground vs. Majors After ADP Employment Misses
