The US Dollar Index is currently edging up but had earlier hit a 3-week trough after yesterday’s release of US economic data disappointed investors. ADP labor figures showed that only 153,000 new jobs were created in December, down from the 215,000 new jobs in November and well below the 170,000 forecasted by analysts. Though not always an accurate precursor, investors tend to rely on ADP data to gauge the US government’s labor figures, aka Non-Farms Payrolls, which are released on the first Friday of each month. Currently, the latest consensus of analysts polled is showing new private sector jobs for December at the flat rate of 178,000, with a slight rise in the unemployment rate to 4.7% from the current 4.6%.

As reported at 11:43 am (JST) in Tokyo, the EUR/USD was trading at 101.570 .DXY, up 0.05%. The USD/JPY was higher at 115.788 Yen, a gain of 0.31% while the AUD/USD was flat at $0.7341. The EUR/USD was lower at $1.0588, down 0.15%.

Is a Sentiment Shift for Dollar Ahead?

Any disappointment in the actual figures will weigh on the Dollar and could result in a shift in sentiment as regards the “thinking” of the Federal Reserve. The Fed has promised three rate hikes in 2017, however, labor data is an important component in the Fed’s decision making process. The Fed has a dual mandate of full employment and price stability, and any deviance from positive labor figures could result in the Fed’s timing for a rate hike to shift further back.