Dollar Slumps as ADP Report Shocks Market, Biggest Jobs Loss in Six Years
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In the currency market, the dollar hit the skids against the euro. Late Wednesday, the euro was trading at $1.588 vs. $1.578 on Tuesday. Traders essentially shrugged off a June factory orders report that came in better than expected at a 0.6% gain vs. economists’ projections for a rise of 0.5%.
Instead the focus was on jobs. Perhaps foreshadowing today’s June payrolls report from the Bureau of Labor Statistics, the ADP employment index indicated that private-sector firms in the U.S. lost 79,000 jobs last month.
That’s the biggest drop in nearly six years and it doesn’t bode well for an interest rate hike from the Fed anytime soon. Combine that with an anticipated rate hike from the ECB today, and you have a predictable scurrying of dollar bulls for cover.
Boris Schlossberg, of DailyFX.com, fears for the worst today. “Because the ADP index has been consistently more positive than actual figures, the fact that today’s numbers were so bad really shocked the market,” he said.
Meanwhile ECB President Jean-Claude Trichet left himself little wiggle room by saying that, “We central banks have a big responsibility … If we’re not decisive, there’s a risk of inflation exploding. If we act in a decisive way, we can master the situation.”
Source: Dollar Slumps as ADP Report Shocks Market, Biggest Jobs Loss in Six Years
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Tags: Doug Casey, euro, UD dollar, US jobless ratesAbout the Author
Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.