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EUR/USD Drops on ADP Employment, Rebounds

December 4, 2013 (Last updated on December 5, 2013) by

EUR/USD slumped sharply today after the ADP employment report came out much better than was expected. Yet the currency pair bounced back to the opening level by now. As usually, nonfarm payrolls are released the same week as ADP data and are by far more important report. The nonofficial report may help traders to assess the state of the labor market ahead of payrolls, but it often is quite different to official data.

ADP employment rose by a massive amount in November — 215k. It was far above the projected value of 172k. Moreover, the October reading, which initially disappointed economists, got a huge positive revision from 130k to 184k. (Event A on the chart.)

US trade balance deficit was at $40.6 billion in October, near the analysts’ estimates, down from upwardly revised $43.0 billion in September. (Event B on the chart.)

ISM services PMI slid from 55.4% in October to 53.9% in November, while experts promised it to remain the same. (Event C on the chart.)

New home sales jumped to the seasonally adjusted rate of 444k in October, exceeding the predictions of 432k and the September reading of 354k, which was also released today because of delay due to the US government shutdown. (Event C on the chart.)

Crude oil inventories decreased by 5.6 million barrels, following the 3 million increase in the previous week, and total motor gasoline inventories increased by 1.8 million barrels last week. (Event D on the chart.)

EUR/USD for 2013-12-04

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