On Wednesday 03-04-09 at 8:15 AM ET, the USD ADP Non-Farm Employment Change report will be released for the month of February.
The ADP report leads the U.S. Government Employment Change report by 2 days, which is due Friday 03-06-09 at 8:30AM ET.
The previous USD ADP report came out on Wednesday 02-04-09 at 8:15 AM ET.
The USD ADP report released in February, for the month of January, was set up as follows:
“Previous” Report: -693K – down from -476K (revised) December report.
Economists “Forecast”: -528K – looked like an improvement.
The “actual” report: -522K – even better by +6K
The last 4 USD ADP “previous” reports have been “revised” just a few minutes after the actual report release, February was no exception, it was “revised” by +34K to -659K.
The “revisions” could have an effect on the currency market – but I have not seen it yet.
I monitored 4 currency pairs during the February USD ADP report and here is what happened:
EUR/USD – moved against the USD about 60 PIPS
GBP/USD – moved against the USD about 80 PIPS
USD/CAD – moved in favor of the USD for a single minute then moved against the USD about 140 PIPS
USD/JPY – this was the only currency pair which moved in favor of the USD, but only about 18 PIPS in 38 minutes
The USD ADP Non-Farm Employment Change for this month’s release (a report on February Employment change) has a “forecast” of -620K, a decrease in the number of employed persons to -522K, a loss of almost 100K jobs.
If the “actual” USD ADP report comes out less or more than the “forecast” by a large amount, say 50K or more, this would be a huge surprise for FOREX traders and the market may move considerably in the following minutes of the report.
So, let’s set this up:
The February “previous”= -522K
The economists “forecast”= -620K
If the “actual” report comes out -670K or more, this will be real bad for the USD, and a big surprise for traders. A currency pair using the USD could see the market move against the USD.
However, if the “actual” report comes out at -570K or less, this would be good for the USD and again, a big surprise for traders. A currency pair using the USD could see the market move in favor of the USD.
The probabilities set forth above are assuming no unpredictable events are taking place at the same time.
Speeches on the economy by government officials, or a situation somewhere in the world that could have an impact on the U.S. economy – could adversely affect the market.
Sometime after the end of the USD ADP report I will post a results. So, check back!
Wednesday 03-04-09:
Here are the results of USD ADP Non-Farm Employment Change report:
Looks like more people lost their jobs last month, 83,000 from the “revised” January report. This report is bad for the USD!
Here is how it affected the 4 currency pairs I follow:
EUR/USD – moved down about 20 PIPS in 5 minutes – wrong direction
then moved up about 38 PIPS in 13 minutes – right direction
GBP/USD – moved down about 25 PIPS in 14 minutes – wrong direction
then moved up about 40 PIPS in 13 minutes – right direction
USD/CAD – moved up about 30 PIPS in 9 minutes - wrong direction
then moved down about 80 PIPS in 44 minutes – right direction
USD/JPY – moved erratically up and down for 12 minutes – confusion?
then moved up about 20 PIPS in 22 minutes – wrong direction
Looks like only 3 of the currency pairs traded in the right direction eventually, so, if you were patient in the first few minutes of the market, and entered a trade with either of the 3 currency pairs which moved in the right direction, you could have had a winning trade.
Looks like the USD/CAD currency pair was the best trade today.
