NFP Quick Analysis: Why the meager 245K rise is unlikely to depress the dollar, three reasons

  • The US economy gained only 245,000 jobs in November, far below expectations. 
  • Weak job gains are unlikely to trigger robust stimulus. 
  • A squeeze on dollar shorts ahead of the weekend 

It is all a matter of timing. An increase of 245,000 jobs would be considered robust in the pre-pandemic era, but when the data relates to November 2020, a figure in the upper edge of the old normal represents the end of the recovery. 

NFP live coverage

The US dollar edged lower in the initial aftermath but has three reasons to bounce after suffering a downfall throughout the week.

1) Limited impact on lawmakers

One of the reasons for the dollar's downfall came from a bipartisan group of senators who laid out a $908 billion stimulus deal. Despite the across-the-aisle nature, Senate Majority Leader Mitch McConnell has remained mum on the topic and he reportedly prefers a smaller package. 

Is this weakness enough to push McConnell and others to action? It may raise the chances of approving a deal worth around $1 trillion – but that is already priced in by markets. Without a bigger relief package – which may or may not come in January – the safe-haven dollar could rise. 

2) Vaccine bounce

Another unrelated risk-on factor came from the UK's approval of the Pfizer/BioNTech coronavirus vaccine. However, Dr. Anthony Fauci criticized the rapid process and the firm will likely produce fewer doses. While Fauci later apologized, these immunization concerns may also add to pressure on the safe-haven greenback. This is the chance for profit-taking

3) Fed firmly on hold

Jerome Powell, Chairman of the Federal Reserve, testified on Capitol Hill and refrained from offering more stimulus in the upcoming meeting. He has good reasons – waiting for the vaccine, for the new administration, and for seeing the full impact of the virus on the economy. While job growth is weak, it is insufficient to trigger more monetary stimulus – not enough. 

More Dollar downfall explained and what's next for markets

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.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD falls toward 1.19 after robust US Nonfarm Payrolls data

EUR/USD is trading above 1.19 after dipping below that number in response to the US Nonfarm Payrolls, which showed an increase of 379K jobs in February. Higher yields in response to Powell are keeping the dollar bid.


GBP/USD recovers after post-NFP dip below 1.38

GBP/USD is trading above 1.38 bus till down the day. The US gained 379.000 jobs, roughly double than expected and supporting the dollar. The Senate's stimulus debate is eyed.


XAU/USD battles 1700 level

Gold is staging a rebound toward $1,700 amid proift-taking ahead of the weekend but remains on track to close the third straight week in the negative territory.

Gold News

Ethereum price primed for a swift recovery as the network prepares for a major update in July

Ethereum price aims for a significant recovery towards $2,000. A major upgrade scheduled for July intends to fix the problem with gas fees on Ethereum. ETH miners are not happy with the decision.

Read more

US Dollar Index pushes higher to 92.20 on stellar Payrolls

The march north in the greenback remains unabated and trade in fresh 2021 highs beyond the 92.00 hurdle when tracked by the US Dollar Index (DXY).

US Dollar Index News

Forex Majors