NFP Quick Analysis: Another greenlight for greenback gains after Powell


  • The US has gained no fewer than 379,000 jobs in February.
  • Dollar advances are set to continue as hiring as a vaccine-led recovery unfolds. 
  • Fed Chair Powell's reluctance to counter the bond rout is already underpinning the dollar. 

Big surprise – albeit not for all – in the US Nonfarm Payrolls report for February. The world's largest economy gained 379,000 jobs, around double the early estimates of 182,000. Moreover, it is topped off by upward revisions worth 159,000. In the private sector, around 465,000 new positions were created, also encouraging news. 

This is good news for the dollar – Ten-year bond yields leaped to a new one-year high of 1.622%, surpassing the previous spike level, and pushing the dollar higher. EUR/USD is struggling to hold onto 1.19 while GBP/USD already took a dip under 1.38. USD/JPY is extending its relentless rise above 108.50 and gold extends its meltdown.

More may be in store and not only because the "trend is your friend".

Follow all the NFP updates here

The NFP has been released on the backdrop of Federal Reserve Chair Jerome Powell's comments on Thursday. "Caught my attention" was the only gesture Powell offered to the sell-off in bonds that has sent stocks falling and the dollar rising. The Fed sees inflation increases as transitory, financial conditions as still accommodative and the task of bringing ten million Americans back to work as daunting. 

Will this NFP change the Fed's mind in any direction? Figures perceived as weak could have triggered an expansion in the bank's bond-buying scheme, thus weakening the dollar. Data seen as pointing to robust recovery may trigger concerns of rate hikes and boost the greenback. 

As the latter scenario has unfolded, King Dollar may feel more comfortable on its throne. The Fed seems content with its current policy, and unlikely to budge – at least not until its next meeting on March 17. 

All in all, the wait for the NFP has caused a pause in dollar gains, and now the greenback has a new green light for gains. 

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.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD tumbles below 1.21 as US CPI smashes estimates

EUR/USD has tumbled below 1.21 after Core CPI came out at 3%, far above 2.3% projected. The robust figures may hasten the Federal Reserve's tightening. 

EUR/USD News

GBP/USD extends slump sub-1.4100 as dollar rallies

GBP/USD has  extended its decline after US CPI beat estimates with 4.2% while Core CPI came out at 3%. Earlier, UK GDP beat expectations with -1.5%. Volatility is rising.

GBP/USD News

XAU/USD tests $1,820 as USD capitalizes on US CPI data

The XAU/USD pair fluctuated wildly in the early American session as investors assessed the latest inflation report from the US. After spiking to a daily high of $1,843, the pair reversed its direction and dropped to $1,820 area.

Gold News

BTC may drop to $34,000, taking the rest of the market with it

Bitcoin price defining a bearish top formation after weeks of indecision. Ethereum price blitzes bears with steady price momentum. Ripple price fails pattern test, poised for further losses.

More Crypto News

US Consumer Price Index April Preview: The two base effects of inflation

American consumer prices are set to rise by the most in a decade as the base effect from last year’s pandemic collapse reaches its height. The Consumer Price Index (CPI) is expected to climb 0.2% in April.

Read more

Majors

Cryptocurrencies

Signatures