Positive U.S. Jobs Report Sends EURUSD Higher

A.D.P. reported United States (U.S.) private sector employers added 170,000 positions in January. December added a revised 292,000 number of jobs. For January, analysts projected growth of 182,000. Despite this, the past three month (November, December, and January) average calculated to 223,000 a higher monthly average compared to the mean for all of 2011 at 163,000, according to ADP. Some of the largest job additions were in service and goods production sectors at 152,000 and 18,000 respectively. Additionally, manufacturing created an additional 10,000 positions. Small and medium size companies contributed the most of all businesses in additions to the employment numbers. Small business added the most positions at 95,000 while medium sized businesses added 72,000. Larger companies (those employing greater than 499 persons) only added 3,000 new people. The United States Labor Department will release their job figures this Friday. Economists expect unemployment to stay at 8.5% and analysts forecast nonfarm payroll employment numbers will have increased by 125,000 for January.

In other U.S. news, the Institute for Supply Management’s manufacturing index increased to 54.1% under analysts’ expectations of 54.5% but higher than December’s 53.1%. The number for January was the highest number in eight months exhibiting growth in manufacturing activity. Additionally, January’s increase was the 30^th consecutive month for increases in the manufacturing sector. Growth in new orders increased 2.8% in January exhibiting 33 consecutive months of increases in new orders. Raw material prices saw an increase for the first time in four months. Manufacturing is beginning the year on the good side with growth in new orders, employment, and production.

Markets were filled with positive sentiment on the economic reports and reports that progress was being made on the Greek debt negotiations. The EURUSD has been in a range this week after failing to break through support at 1.3100. The pair rallied towards resistance at 1.3200 and is testing that level for the third time this week. If the pair breaks above 1.3200, the next level of resistance is seen at 1.3300.

Eugene Ross, Analyst

Admiral Markets

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