ADP Non-Farm Figure Set to Generate Volatility

A slow news day yesterday resulted in very little movement for the US dollar against its main currency rivals. After dropping close to 20 pips during the first part of the day, to trade as low as 78.12, the USD/JPY was able to bounce back to the 78.25 level in the afternoon trading. Against the CAD, the greenback was able to move up to the 1.0040 level after a worse than expected Canadian GDP figure was released. Overall, the USD/CAD advanced close to 40 pips during the European session. Today, dollar traders can anticipate significantly more volatility in the marketplace following the release of the ADP Non-Farm Employment Change at 12:15 GMT. The ADP indicator is considered an accurate predictor of Friday's all important Non-Farm Payrolls figure and consistently leads to heavy price swings for the greenback. Later in the day, traders should note the FOMC Statement at 18:15. Any indications that the Fed is getting ready to initiate a new round of quantitative easing could result in dollar losses during evening trading.

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