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.

The greenback advanced after U.S. President-elect Barack Obama said he favors an economic package of about $775 billion. With this planned U.S. stimulus package investors are betting that this would help the world’s largest economy emerge from its recession more quickly than most countries. According to analysts, investors are leaning toward EUR selling because there appears to be growing signs that the European Central Bank (ECB) will cut Interest Rates during its next meeting.

However, the recent week’s gains in the U.S. currency versus the EUR may be limited by speculation that U.S. services activity shrank to the lowest level since records began in 1997. Economic reports are showing that fewer Americans signed contracts to buy existing homes in November and factory orders are falling for a fourth consecutive month; this is likely to weigh heavy on the Dollar. Moreover, several analysts have said that given the Dollar’s sharp gains over the last few days, the currency may be due for a short-term pullback.

Looking at today’s trading, investors should note that an important indicator is set to be released at the opening of U.S. markets. The ADP Non-Farm Employment Change indicator will give a prediction about this Friday’s upcoming employment data. If it indeed indicates that the employment sector is not shrinking as fast as previously thought, the USD will gain much support. However, the opposite may happen if this indicator points to a further contraction in U.S. employment.