With Friday’s non-farm payroll report out of the US and the usual volatility which comes with it forex traders often try to position their portfolios ahead of the release, depending on their forex strategy as well as time horizon. Day-traders and scalpers act as the report will be released, while medium to long-term traders prepare their accounts in advance.
Economists expected a gain of 200,000 jobs, but the actual figure came in much stronger at 238,000 which marked the best gain since November 2012. On top of the positive figure, the previous month’s 215,000 increase was revised higher to 229,000 which could translate into a upward revision to the non-farm payroll report released in December.
Given the surprise in the ADP report it is possible to see a better than expected non-farm payroll report on Friday. Economists currently expect to see an increase of 195,000. It is worth noting that ADP has issues with accuracy over the past few years and today’s data point neither ensure nor prevents a surprise in Friday’s report.
The 2013 ADP average job gain per month was 179,600, up from 2012 where the average stood at 163,000 job gains per month. This is a healthy improvement, but by a far lower figure than required in order to point towards a healthy and sustainable economic recovery. The US Dollar is likely to trade heavily on Friday after the NFP report has been released and forex traders need to be prepared for erratic price movements on higher volume.
Small companies led job creation in December once again and created 108,000 jobs which is a very positive sign for the US labor market. Large businesses added 71,000 jobs while medium-sized companies added 59,000 jobs.