ATFX: Non-farm ADP employment adds 62k jobs, far exceeding the expected 40k

Topic: ATFX Forex Column Submission

April 2nd, ATFX: The ADP non-farm employment data is an important reference indicator for Friday’s non-farm payroll report. According to the data released yesterday, the US March ADP employment increased by 62,000, far exceeding the expected 40,000, and slightly below the previous 63,000. Although the latest figure is close to the previous one, the result above expectations has already boosted market confidence.

▲ATFX Chart

Looking at historical data, the peak of ADP occurred in August 2021. Over the past more than four years, the overall trend has been downward. In 2025, there were four instances where ADP data turned negative, while 2026 has not seen such a situation. 2025 was the year when President Trump intensified efforts against illegal immigration, significantly impacting the labor market, with some months showing negative employment numbers, which is understandable. In 2026, due to budget issues, Trump significantly curtailed ICE’s authority. Especially at sensitive locations like hotels, consumer sites, and airports, public arrests were no longer conducted. This somewhat eased tensions in the labor market, so ADP data this year is likely to be generally better than in 2025.

Tomorrow at 8:30 PM, the US March non-farm employment report will be released, with the new non-farm employment figures being the most closely watched. The previous value was a decline of 92,000, with an expected 55,000. Although the expected figure is positive and the previous was negative, making the data seem optimistic, longer-term historical data shows that 55,000 new non-farm jobs per month are relatively low. If tomorrow’s data cannot significantly surpass the 55,000 expectation, the US dollar index may still face downward pressure.

In fact, besides Trump’s immigration policies, currently focused AI artificial intelligence also poses a shock to the labor market. AI can replace some repetitive human labor, leading business owners to halt or reduce recruitment for some entry-level positions. Although this impact is not as severe as ICE’s actions, its prolonged duration can shake market confidence and warrants close attention.

▲ATFX Chart

In terms of market trend, on the daily chart, the US dollar index shows signs of breaking out of the upward channel. The upward channel formed over the past two months has lost its constraint. Since March 13, the dollar index has formed a typical oscillating structure, with an upper limit of 100.51 and a lower limit of 98.85. Nearly a month of candlesticks have remained within these bounds. Without new strong expectations, the dollar index is likely to maintain a sideways consolidation pattern for the day.

Looking at the long-term, the dollar index reached a cyclical high of 114 in September 2022 and has been in a downward trend since, without forming a reliable bottoming structure. Therefore, the dollar index may continue to move downward toward 90, 80, or even 70. However, this long-term bearish trend does not negate the possibility of a medium-term rebound. How the dollar index develops will depend on specific analysis of Federal Reserve monetary policy and the current US international standing.

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Editor: Chen Ping