Forex Today Update and Wrapup

US ISM MANUFACTURING INDEX RISE TO 42.9

ISM Non-Manufacturing for January surprised analysts with a rise to 42.9 from a revised 40.1 in the previous month; analysts surveyed had expected the indicator to decline to 39.0. The higher figure reflects a similar move with the ISM's Manufacturing and Prices Paid indicators on Monday which also beat expectations of a decline and showed a rise. ISM Non-Manufacturing has been below 50 for the 4th month though improvements in ISM data this week signals that contraction may be less in the months ahead. ISM data is now well off its low of 37.4 in November and continued improvements may signal a bottoming in the first half of 2009.

US ADP DECREASED TO 522000

According to Automated Data Processing (ADP) nonfarm private employment decreased by 522,000 from December 2008 to January 2009 on a seasonally adjusted basis, an indication the worst recession in the post-war period is worsening. The Fed believes employment will weaken going into 2010. Today's report showed that sharply falling employment at small to medium size businesses clearly indicates that the recession continues to spread beyond manufacturing and housing-related activities.

UK PMI IMPROVED TO 42.5

U.K. services PMI improved more than expected in January, reaching 42.5 against our survey median for a pick-up to 40.5 from 40.2 in December, suggesting that sentiments now appear to be bottoming and the impact from recent aggressive rate cuts and fiscal stimulus measures starting to have an impact. The employment index fell further, however, to 40.2 from 40.5, the lowest since the series began in 1996.