NFP Quick Analysis: The USD does not need reasons to remain resilient, but pointing fingers at Florence helps
|- The US NFP missed on the headline, but fingers are pointed to Florence
- The upward revision, the OK wages, and the 48-year low in unemployment all help.
- The trend remains the friend, and the Dollar remains King.
The US gained only 134,000 positions in September, significantly lower than official expectations that stood at 185,000 and below unofficial projections which were higher. Fingers are pointed to Florence. The BLS said that Hurricane Florence might have affected some industries. Everybody knows that the storm was not as harsh as Harvey or Irma last year, but for markets, it is good enough.
Also, the upward revision in August's figure also helps. According to the update, the economy gained 270,000 jobs, much better than 201,000 posted initially. Wages, which usually steal the show, met expectations with 0.3% MoM and 2.8% YoY, not outstanding, but more than good enough. The headline that is important for the White House is that the Unemployment Rate dropped to the lowest levels since August 1969, when the Woodstock Festival was held.
The greenback initially dropped but never went too far. It managed to stabilize.
In the broader scheme of things, the Fed is hawkish (as we were reminded once again by Powell this week) and this report does not change the picture. US 10-year bond yields which made a significant breakout this week, are on the rise once again, above 3.20%.
It seems that almost any NFP number would have pushed the greenback higher. A win-win situation for King Dollar.
Background
The September jobs report carried high expectations: 185,000 jobs gained and a monthly wage gain of 0.3%. Real or "whisper" expectations were even higher after the ADP NFP showed an impressive gain of 230,000. In addition, the ISM Non-Manufacturing PMI came out at 61.6 points, the best score on record.
The US Dollar was well-positioned into the event. Apart from the data, US bond yields soared above 3.20% to the highest in seven years and Fed Chair Jerome Powell was hawkish in his speech, suggesting tight monetary policy is an option.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.