• 20K jobs created vs. 180k expected

  • Unemployment -0.2% to 3.8% vs. 3.9% expected

  • Wages 3.4% yoy vs. 3.3% expected

  • Dec. revised higher from 220k to 227k

  • Jan. revised higher from 304k to 306k

Dollar & sold off in a knee jerk reaction, Dow futures & S&P futures extended losses.

  • EUR/USD + 0.3 % at $1.1230,

  • Dow futures down 200 points at 25273

  • S&P futures -0.7% at 2729

Risk off dominated heading into the NFP report on global growth concerns. The ECB’s dismal outlook for the eurozone, combined with weak data from China overnight fuelled fears over the outlook for the global economy.

The headline US jobs figures was much worse than forecast, heightening concerns over the health of the US economy whilst sending the dollar and US equities tumbling lower.

December’s headline figure and January’s, which were both already high were revised upwards. Despite February’s odd number the average across three months is 184K, which is approximately what would be expected around this stage of the economic cycle.  Let’s be honest, after two outstanding months a payback month is not so unreasonable.

A bright spot in the report was the wage increase. 3.4% is the highest level of wages increase since April 2009. This, along with the falling rate of unemployment indicates that the US labour market is tightening. Wages are increasing which will increase inflationary pressures. 

Dollar still a buy

There was always going to be some noise surrounding this report given the US government shutdown. The headline figure was eye-catchingly bad, which resulted in a strong knee jerk reaction from the markets. However, there were also some bright spots such as wage growth, unemployment rate and upward revisions of previous months. Importantly, the three-month average is still where we would expect it to be.

The dollar is the best of a bad bunch right now. The ECB turned decidedly dovish, China downgraded its growth outlook, the pound is overwhelmed by Brexit uncertainty. The list goes on, the BoC removed its hawkish bias, the BoJ and RBA also have tilted towards the dovish end of the spectrum.

Whilst the Fed are pausing on hikes, as this report shows inflationary pressures are increasing in the US economy. This puts the dollar ahead of its rivals.

CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD hits two-week highs near 1.11 amid trade hopes

EUR/USD is rising toward 1.11, trading at the highest since November 5. Hopes that a US-Sino trade deal may be reached are improving the market mood and weighing on the safe-haven dollar. 

EUR/USD News

GBP/USD reverses and hits fresh lows near 1.2910

The GBP/USD pair dropped from the highest level since Monday at 1.2969 to 1.2912, slightly above Asian session lows. The reversal took place amid a stronger US dollar across the board.

GBP/USD News

USD/JPY bounces-off 50-DMA but lacks follow-through

USD/JPY has bounced up from the 50-day MA support of 108.28. China's Vice Premier Liu He is cautiously optimistic about the prospects of the US-China trade deal. Related markets, however, are not buying Liu He's optimism, keeping the recovery in check. 

USD/JPY News

US Dollar Index looks volatile below 98.00, attention stays on trade

The US Dollar Index (DXY), which tracks the buck vs. a bundle of its main competitors, alternates gains with losses on Thursday around the 97.80/90 area.

US Dollar Index News

Gold: Remains vulnerable below 100-day SMA

Gold seems to have stalled its recent corrective bounce from three-month lows and witnessed a modest pullback from previous support, now turned resistance near 100-day SMA.

Gold News

Forex Majors

Cryptocurrencies

Signatures