ADP Points to Weak Non-Farm Payrolls on Friday (page 2 of 2)

The stark contrast between the actual performance of the Eurozone's labor market led by Germany and the expectations for how the US labor market will perform should on a macro longer term level, continue to cushion any further losses in the EUR/USD. Meanwhile Switzerland reported a softer PMI number. The index dropped from 67 to 65, which is in line with the economy's overall slower pace of growth. It is however still solidly in expansionary territory.

British Pound - The British pound was the day's biggest market mover, having fallen by 1.17 percent or 230 pips against the US dollar. UK economic data was strong with construction sector PMI rising from 54.8 to 57.5 and department chain John Lewis reporting record clearance sales. It is no secret that the UK housing market is strong and this is providing solid support for overall consumer spending. However, since it is not a surprise, the market has priced this in already. Furthermore, having been one of the currencies that appreciated the most when the US dollar broke down over the Thanksgiving holidays, it is also the currency that has pulled back the most off of today's dollar strength.

Japanese Yen - After having weakened significantly today, the Japanese Yen is stronger across the board, against every major currency except for the US dollar. The Japanese markets were still closed last night which means that there was no economic data released. However comments from central bank officials continued to drive the currency's movements. In an interview with Nikkei News, Bank of Japan's Muto talked about the economy's expansionary power and how weak consumption should be temporary. He also added that interest rate hikes are in line with Prime Minister Abe's pro-growth plans. At this point the surprise would be if the central bank does not raise rates by a quarter of a point later this month.

Commodity Currencies (CAD, AUD, NZD) - After strengthening yesterday, the commodity currencies are weaker across the board. Both gold and oil prices closed lower, which helps to explain today's move. With temperatures predicted to reach above 60s this weekend here in NY, it feels far more closer to summer than it does winter. As a result, oil prices may continue to struggle to rally. Canadian inflation numbers are due out tomorrow. After a drop in November, prices are expected to rebound. Australia has its service sector PMI report due for release. No major changes are expected although the indicator could follow in the footsteps of the manufacturing sector report, which eased slightly last month. New Zealand reported trade deficit figures for the month of November with a mild improvement in the overall deficit thanks to stronger exports.