The US dollar fell after the private jobs survey from ADP revealed that the US lost 54K jobs in September. The August report was also revised to -3K from +54K.
The ADP report has been flagging softness for months but the official government data didn’t catch up until large revisions in the past two months. This edition is likely to take on extra significant with the US government shut down. Unless that’s quickly resolved, Friday’s non-farm payrolls report won’t be released. The next Fed meeting is Oct 29 and there won’t be a jobs report beforehand.
The kneejerk in the dollar was around 50 pips lower on the headlines but USD/JPY has bounced back. The market may be more focused on government shutdown headlines and the turn of the calendar but I expect economic data to ultimately win out. There is a clear trend towards weakening and the Fed has ammunition to cut.
