The US private sector added more workers than they have in almost three years according to this morning’s ADP Employment Report. This bodes well for Friday’s nonfarm payroll report, which investors are keenly watching. This will make the market consensus more difficult to gauge. Where markets were expecting the February report to add about 190,000 jobs, we are more likely to see a stronger figure given the historic correlation between ADP employment and nonfarm payrolls from the Bureau of Labor Statistics. Should the report indeed be well above consensus, there is room for further USD appreciation as it would all but confirm the viability of a March rate hike.

The U.K. budget came in largely as-expected, offering little support for the British pound. Despite an upgrade to near-term growth forecasts, longer-term growth expectations were flat or revised lower, suggesting that recent economic strength is a front-loaded outlier, not a new normal for the UK. The pound remains near 7-week lows.

The Aussie dollar took a hit after Chinese trade posted the first trade deficit in three years. Investors were looking for a trade surplus of more than 25 billion dollars, a deficit of $9.15 billion was a far cry from consensus. This time last year, the trade balance was in excess of a $28 billion surplus. This doesn’t necessarily spell doom-and-gloom for the long-term outlook as the Lunar New Year can distort figures and may be to blame for the 38% jump in imports.

Led by external demand, the Japanese economy expanded for a fourth quarter in October through December last year. Despite the growth through 2016, yen is weaker this morning as the dollar advanced from a strong private payrolls report.

EURUSD:   Euro slightly weaker, France posted the largest trade gap on record in January.

GBPUSD:  Sterling remains at 7-week lows, pushing lower after the UK budget did little to inflate the pound.

AUDUSD:  Aussie dollar is lower after China posted a surprise trade deficit.

CADUSD:  Canadian dollar weakness on account of USD strength after private payrolls beat.