Data from ADP send negative signals to the dollar

Traditionally, on the eve of the release of official statistics on the labor market in the United States, unofficial data on the number of new jobs created in the US by ADP are published (note that data from ADP cover only the private sector, state enterprises are not included in it).

The ADP report reflects the level of employment Data are received from approximately 500,000 US legal entities. And although the level of correlation between ADP and NFP data is not very significant (about 30-40%), nevertheless, ADP data are an important indicator, especially on the eve of the main data block.

The data published today turned out to be worse than the forecasted values and much lower than the indications of the previous period. The growth rate was 178 K (forecast 190 K, the previous 204 K). In general, the figure is excellent, but the fact of its lagging behind the market expectations sends a negative signal to the dollar and adjusts to a negative mood on Friday, when the NFP figures will be published. Another alarming signal for the dollar was a significant negative revision of the April values from 204K to 163K.

It is also worth noting that the data on US GDP, also published on Wednesday, was below forecasts.

In total, we consider today's data as a reason for the start of dollar sales. Recall also that for two months in a row the data on the NFP are worse than forecasts, which is quite an alarming signal for dollar buyers.