Why better payroll may not boost Dollar?

Recovery and inflation less jobs - that is the key reason, why a better than expected payroll number may not be a major boost for Dollar.

This week Dollar has declined heavily. For the past four days, Dollar index, which is value of Dollar against basket of six currencies declined from, 99.63 to 96.65 as of now. In yesterday's selloffs, it was as low as 96.25.

• US unemployment rate has fallen to 5%, close to FED's longer run average expectations of unemployment, which is consistent with the other inflation mandate. So, next FED hike focus would be inflation rather than unemployment.

• Nevertheless, wage growth remains a key component that might boost Dollar as it is expected that people will spend more, if wages rise and help boost inflation.

Wednesday's release of ADP employment number shows evidence why better payrolls may not be enough.

Weak non-manufacturing ISM and relatively dovish speech by FOMC pushed Dollar to its 16th biggest slide in 10 years, however the chart above shows, much better than expected ADP employment was hardly a boost. Its falling rate hike expectations that has been pushing Dollar and it might keep doing so, despite better payroll.

Dollar index is currently trading at 96.62, up 0.07% so far today.