- ADP data shows strong increase in private sector employment in August.
- US Dollar Index recovers modestly from lows ahead of PMI data.
- Coming up: IHS Markt Services PMI and ISM Non-Manufacturing PMI.
The AUD/USD pair rose to its highest level since August 1 at 0.6826 earlier today but lost its momentum after the upbeat employment data from the US helped the Greenback gather strength. As of writing, the pair was trading at 0.6817, still adding 0.3% on a daily basis.
The strong PMI data from China earlier this week allowed China-sensitive antipodeans to gain traction on hopes of the Chinese economy picking up momentum. Additionally, the selling pressure surrounding the USD amid expectations of the Federal Reserve opting out for an aggressive dovish shift in September allowed the pair’s bullish momentum to remain intact.
ADP data helps USD limit its losses
However, the monthly data published by the Automatic Data Processing (ADP) today showed that the privates sector employment in the US increased by 195,000 in August to surpass the market expectation of 149,000 by a wide margin and helped the US Dollar Index, which dropped to a weekly low of 98.14 earlier in the session, recover modestly and caused the pair to ease from its highs.
Commenting on the data, “Businesses are holding firm on their payrolls despite the slowing economy. Hiring has moderated, but layoffs remain low. As long as this continues recession will remain at bay,” said Mark Zandi, chief economist of Moody’s Analytics.
At the moment, the US Dollar Index is still down 0.17% on the day at 98.24. Later in the session, the IHS Markit will publish its Services and Composite PMI data alongside with the Institue for Supply Management’s (ISM) Non-Manufacturing PMI report.
Technical levels to watch for