US Dollar Rebounds, Yields Rise Amidst Weakening ADP Job Growth

US Dollar Rebounds, Yields Rise Amidst Weakening ADP Job Growth

The dollar is recovering early in the US session as weakening job gains from the ADP reduce stock futures. Besides, Treasury yields rebounded slightly. At the moment, the pound sterling is the strongest in the day, followed by the Canadian dollar. The New Zealand dollar tops the lower Australian currency, followed by the Swiss franc and the yen. Now attention will be drawn to the movement of yields, the reaction of the stock, and the general sentiment.

In February, the number of employed in the private sector of the US ADP increased by 117 thousand, which is lower than the forecast of 168 thousand people. By the size of the company, the small business added 32 thousand jobs, medium business – 57 thousand, large business – 28 thousand. By sector, the number of jobs in the production of goods decreased by -14 thousand. The number of jobs in the service sector increased by 131.

The labor market continues to show a sluggish recovery, according to Nela Richardson, the chief economist at ADP. We can see that large companies are increasingly feeling the impact of COVID-19, while job growth in the goods sector is stalled. As the pandemic is still in the spotlight, the service sector remains at a significantly lower level than it was before the pandemic; however, this sector is likely to gain the most over time through reopening and increased consumer confidence.
The Dollar Index (DXY) Regains but Stays Capped
The dollar continues to be supported by the fundamental background. DXY was unable to advance further north of 91.00 on a more serious note on Wednesday, retreating into negative territory after hitting multi-week peaks in the 91.35 / 40 band.

Investors continue to debate whether incentives from the government and central bank are excessive. The possibility of inflation accelerating as the global economy recovers have raised concerns that monetary policy may need to be tightened sooner than expected. This boosted sovereign bond yields this year and halted bullish rallies in the stock markets.

Despite the strong rebound, the current DXY spike is seen as corrective only as the broader bearish outlook continues to weigh on the dollar. If the region 91.60 is passed, then the next focus of attention should shift to the level (fall of 2020-2021) at 92.46.

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
Share with other traders!

Author : Azeez Mustapha

Avatar

Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.