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Strong ADP employment brings FED closer to rate hike

Probability of a rate hike in September moved up as US ADP employment surprised to upside.

  • ADP is a good precursor of NFP report, which is scheduled at 12:30 GMT tomorrow. Dollar could find its upward groove back if NFP supports ADP's gain.

Key highlights -

  • Non-farm private sector employment grew at 237,000 in June, highest since December last year. Median expectation was for 218,000. May payroll got revised by 2000 to 203,000.
  • Small business sector hiring at 120,000, 2000 less than last month.
  • Employment in franchise increased by 28,800.
  • Mid-sized companies added 86,000 jobs.
  • Large sector added 32,000 jobs.
  • Manufacturing sector created 7000 jobs.
  • 12000 jobs were added in goods producing sector.
  • Construction sector added 19,000 on payroll.
  • Services sector employment remains robust as payroll added 225,000 people in May.

Most of the currencies were pushed down against dollar after the release, however impact is somewhat mute as expected, since Greece referendum and tomorrow's payroll remains the focus.

Dollar index is currently trading at 95.9, up 0.4%, traded as high as 96.06 post release. Dollar is likely to find its groove back, as stronger employment brings FED closer to first rate hike.

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