Forex today: ADP report nails dollar down, oil breaks below $50.00

Markets continue to back the greenback with a continuation of positive data come from the US economy. The ADP report was adding 298,000 new jobs during February and this drove demand for the dollar as investors are expecting a strong Nonfarm Payroll report this Friday. US 10yr treasury yields rose from 2.51% to 2.58% and to a three-month high while markets fully price in a rate hike from the Fed next week. At the same time, oil was on its knees and crashing almost $3.00 in WTI and below $50.00bbl while commodities elsewhere also struggle in a dollar strong environment. 

The euro was down around 50pips, the yen lost 116 pips between highs and lows on the day and sterling received a battering despite the chancellor's optimistic Budget that supported the pound earlier in the day. EUR/GBP as the driver and took on the bears just below the 0.87 handle to fresh highs. The AUD fell from 0.7600 to 0.7532 and another three-month low while the NZD fell from 0.6980 to 0.6905 to another a two-month low leaving the cross consolidated around the 1.0900 area. CAD took a big hit on WTI towards the close down to 1.35 vs the greenback and making YTD lows.

Day ahead:

For the day ahead the main focus will be with China CPI and PPI for Feb with the median estimate for CPI being 1.7% yoy. We then turn heads towards the ECB in the European session: "At their March meeting, it is likely that President Draghi and the Governing Council will recognise the positive economic developments, but their focus should remain on lingering slack – best represented by soft core inflation (0.9%yr) and high levels of unemployment outside of Germany," explained analysts at Westpac, adding, "There remains a need for continued extraordinary support of the economy."

Main topics in U.S. session

• Gold approaches $1200 amid broad-based USD strength
• EUR/USD: consolidates supply and dollar strength post strong ADP report
• USD/CAD rockets towards 1.3500 on WTI failing below technical support
• WTI under heavy pressure, $51 in sight
• GBP/USD bears stacking up for tests below 1.2000?
• US stock mildly positive on strong ADP report
• ADP report signals towards a strong NFP