The foreign exchange market reacted quite calmly to the publication of a better data on the number of new jobs in the private sector for September, as presented by ADP.
According to published data from the ADP, the US private sector in the economy received 135,000 new jobs, while it was projected that there would be only 125,000. The figures really pleased the market. It showed that the consequences of the three hurricanes, although serious for the US economy, was not so devastating for the labor market. Despite the fact that the data from the ADP are not official and do not always coincide with those coming from the US Department of Labor, they indicate a general trend.
In addition to the employment data in the private sector, the values of the PMI in the services sector also went up yesterday. It rose to 55.3 points from 55.1 points. Also, the index of business activity in the non-manufacturing sector (PMI) from ISM for September showed strong growth to 59.8 points from 55.3 points.
However, despite such positive news, the market reacted rather blandly to the data from the US. This, on the one hand, can be explained by the expectation of the main values for employment in the non-agricultural sector of the American economy that will come out tomorrow. On the other hand, it could also be explained by the factor of uncertainty on who will D. Trump choose as the new Fed head. The intrigue remains intact and it restrains the activity of investors, not only in the United States, but throughout the world. This is because the influence of the Fed's monetary policy on the world remains significant, so market participants are cautious.
As for the candidates of the post of US Central Bank head, there are several of them and they are divided into supporters of the current course and its opponents. If Trump decides, nevertheless, to make changes in the future policy of the Fed, his choice here may be for K. Warsh, who is a supporter of a more stringent monetary policy. This choice will be positive for the dollar.
In our opinion, the likelihood of choosing Warsh or another candidate who will adhere to a more stringent monetary policy is more realistic than other options, since it is similar to the ideas of D. Trump himself.
Forecast of the day:
The EURUSD pair is trading practically unchanged, as well as the overall foreign exchange market. Investors expect data on employment in the non-agricultural sector of the US economy, which will be presented tomorrow. Also, the focus of the market shifts in the direction of D. Trump's future appointments of a new Fed head. Assessing this state of affairs, we can assume that the pair will be trading today in the range of 1.1715-1.1825.
The GBPUSD pair is testing the 1.3230 mark. The breakthrough of this level could be the reason for the price drop to 1.3195, and then to 1.3155.
