By Natalie R. – Following the flow of recent negative economic data, the US dollar dropped to its lowest level in 4 months, prompting speculations the Federal Reserve may renew its monetary easing and start its bond purchasing program again.
The most anticipated news event this week is the Non-Farm Payroll (NFP) report due out this Friday; today investors should follow the release of the ADP Non-Farm Employment Change Estimate at 12:15 GMT as well as the ISM Non-Manufacturing PMI at 14:00 GMT.
Economic news are expected to dominate market sentiment this week as investors attempt to gauge the strength of the US economy recovery which continues to shows signs of slowing. Any negative economic data will put further downward pressure on the dollar.
Today’s leading news events:
12:15 GMT: USD – ADP Non-Farm Employment Change Estimate
– Automatic Data Processing (ADP) issues its national employment report for July later today. This much-maligned measure of the growth of jobs in the US private sector will garner much attention ahead of Friday’s big jobs report from the US Bureau of Labor Statistics. The expectation is for a gain of 39,000 private sector jobs, after the report showed an increase of 13,000 in June.
– Given the latest string of reports from the US which has shown a slow-down of recovery, this report has the potential to add some positive sentiment if the results come in line with, or above, the estimated figure. As a result, the USD could pare some of its recent losses in the short-term. However, Friday’s NFP report will be the primary market mover this week.
14:00 GMT: USD – ISM Non-Manufacturing PMI
– The ISM services index will provide a fresh read on the services sector, which are about two-thirds of US GDP. The expectation is that the index will arrive at 53.1 and a number over 50 represents growth for this sector. The Institute for Supply Management’s index of non-manufacturing activity declined to 53.8 in June, compared with 55.4 in May. If this figure shrinks once more today we could see some sell pressure on the USD.
Forex Market Analysis provided by Forex Yard.
© 2006 by FxYard Ltd
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