The good news for the US Dollar is that it didn’t make a fresh low yesterday! On Tuesday its index against a basket of major currencies hit a low of just 91.44 but then on Wednesday following strong ISM data and after the FOMC Minutes were published, it managed to reach 91.92. On Thursday it began to turn lower once more and in the London afternoon it slipped back to a low of just 91.49. Overnight in Asia it has risen very marginally to 91.60 and in London it has extended the gain to 97.70
The big story of the day in the United States was further strength in the economic numbers and yet another record high for stock markets. The Dow Jones Industrial Average jumped past 25,000 for the first time on Thursday morning, on track to make the fastest run ever to a fresh 1000-point milestone. If the DJIA closes above 25,000, the jump from 24,000 would have taken 23 trading days, ahead of the 24-day spans that took the index to 11,000 in 1999 and 21,000 in March last year.
On the economy, the latest ADP employment report was much stronger than consensus expectations, showing 250,000 jobs were created in December against forecasts of a more modest, but still impressive, 190,000 gain. ADP’s Press released noted, “Throughout the year there was significant growth in services except for an overall loss of jobs in the shrinking information sector. Looking at company size, small businesses finished out 2017 on a high note adding more than double their monthly average for the past six months”.
Today we’ll get to see whether the private sector gauge of the jobs market tallies with the official labour report. ADP has exceeded 250K on 11 occasions since 2014. In all but one of those months, non-farm payrolls were above 200K. Consensus expectations are for non-farm payrolls to have risen by around 200,000 in December which would mean that for 2017 as a whole, a very impressive 2,116,000 new jobs would have been created. For average earnings – which are probably the key to Fed monetary policy – expectations are for a +0.3% m/m increase which would leave the annual rate unchanged at 2.5%. the unemployment rate is seen holding steady at 4.1%.
For now, the USD index opens in North America this morning at 91.67.