US Dollar Gets Boost from ADP Report

US dollar is headed higher today, gaining ground as the latest ADP employment is released. With this positive news, there is an expectation that the Fed really will start tapering its asset purchases soon.

Speculation that the Federal Reserve will start tapering asset purchases is on the rise again, thanks in large part to the fact that the latest private payroll report shows better than expected employment gains in November, there is speculation that the Fed will start stepping back its quantitative easing program.

According to ADP, private sector employers added 215,000 jobs to the economy. The forecast was for 178,000 jobs, so this surprise to the upside has been positive. On top of that, the October figure was revised upward to 184,000 jobs created. All of this is creating a situation in which many believe that tapering will have to begin, providing some strength for the US dollar.

However, the gains are somewhat limited, as traders and investors await the nonfarm payrolls report due from the US government on Friday. It will be interesting to see if the unemployment rate has ticked lower.

At 16:39 GMT the US dollar index is up to 80.7840 from the open at 80.6390. EUR/USD is down to 1.3543 from the open at 1.3588. GBP/USD is is down to 1.6347 from the open at 1.6387. USD/JPY is up to 102.6105 from the open at 102.4250.

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