The U.S. Dollar weakened during yesterday's trading session, correcting the sharp gains against the EUR and JPY seen earlier this week, as steep job losses in the private sector rekindled fears of a prolonged U.S. recession. The USD pushed back from nearly one-month highs against the EUR and five-week peaks versus the Yen. Investors appear to be locking in gains, including central bank EUR buying at lower levels for reserve management purposes.
The Automatic Data Processing (ADP) organization published its Non-Farm Employment Change forecast yesterday. The figure released predicted that an additional 693K individual will have filed for unemployment for the first time in the U.S during the month of December; indeed a heavy blow to the U.S. economy.
As a result, it has had a devastating effect on the Dollar. It should also be taken under consideration that in November alone 476K people lost their jobs and the continuation of these results is a clear sign that the U.S economy is far from pulling out of this recession. It may even be extending its poor outlook on a daily basis.
As for today, the leading U.S. data will be Unemployment Claims. The survey is expected to claim that 545K individuals have filed for unemployment insurance for the first time during the past week. Such a result will be a direct continuation of the recent troublesome figures delivered lately from the U.S. economy and is threatening to hurt the USD. Traders should follow it closely, as any crucial information might ignite a new trend in the market.