A better than anticipated private sector job report gave the dollar a solid run against the euro in early New York action as the odds of a Fed taper seemed to creep a little higher. But once again traders succumbed to skepticism that the Fed is ready to begin its liquidity reduction and profit taking did the rest.
The private payroll company ADP said 215,000 new jobs were added in November, well above the 170,000 forecast, and the October number was revised sharply higher to 184,000 from 130,000.
The euro took an immediate dive at the release dropping from 1.3589 to 1.3571 in the five minutes following and careening to 1.3528 by 9:30 am. On the approach to the day's previous low at 1.3568 traders were clearly targeting the stops below and in 15 minutes the united currency plummeted from 1.3582 to1.3548 and then continued on to the 1.3528 low in the subsequent 45 minutes. The dollar/yen saw a similar spike higher surging from 102.30 to 102.61 in the 10 minutes post issue and to 102.70 by 9:10 am.
Services created the largest number of jobs at 176,000 with construction and manufacturing adding 18,000 each. It was the best month for factory jobs in this report in almost two years. As is typical in this accounting, businesses with fewer than 50 employees placed the greatest number of new workers, 102,000. Large firms with more than 500 employees added 65,000 and mid-sized companies with between 50 and 499 people created 48,000.
The dollar proved unable to retain its gains in subsequent trading, with a sharp fall in the dollar/yen beginning at noon from 102.37 to 102.06 in fifteen minutes carried through to the euro and it climbed from 1.3555 to 1.3605 by 12:35 pm, violently reversing the downward stop run at 1.3568.
Chief Market Strategist
WorldWideMarkets Online Trading