While the upcoming August NFP release might not do much to revive September rate hike expectations for the Fed, it could be an excellent opportunity to grab quick forex profits from the dollar pairs. But before y’all go off to catch those pips, make sure you read this Forex Trading Guide to see what’s in store.
What is this event all about?
Nope, NFP isn’t an acronym for numerous forex profits, although it could yield just that if you play your cards right. NFP actually stands for non-farm payrolls, which measures the change in the number of people employed in U.S. non-farming sectors such as manufacturing, services, or construction. This is reported on a monthly basis, along with the unemployment rate which indicates the percentage of the work force that is jobless and actively seeking employment.
Forex traders also usually pay attention to the underlying employment figures such as the participation rate or average hourly earnings, as these provide more insight on labor market trends. Aside from that, revisions to previous data also tend to affect the dollar’s overall reaction to the jobs report.
What happened last time?
The July NFP report showed that the U.S. economy added 215,000 jobs during the month, lower than the projected 222,000 gain and the previous month’s 231,000 increase in hiring. Meanwhile, the jobless rate was unchanged at 5.3% as expected.
As I’ve discussed in my July NFP review, underlying components reflected steady employment gains across all sectors and that full-time hiring picked up. The participation rate held steady at 62.6%, indicating that Americans are staying in the labor force to carry on with their job hunt, while average hourly earnings showed a meager 0.2% uptick.
What’s expected for the upcoming release?
How might the U.S. dollar react?
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