The U.S. non farm payrolls (NFP) report published on Friday revealed a slowdown of the headline jobs number. The American economy added 151,000 jobs in January coming under the market's forecast of 190,000. In December the economy posted a massive 292,000 (now revised downward to 252,000) and a lower number was anticipated.
The FX market is still trying to price the jobs miss, because there was some positive news. Even with glowing headline job numbers the Fed has been more concerned with wage growth. Hourly wages rose in January by 0.5 percent. The unemployment rate also dropped to 4.9 percent given the strong pace of job gains in 2015. The current unemployment rate in the U.S. is the lowest since November 2007.
The effect of the miss is muted given the impact on an already improbable rate hike by the U.S. Federal Reserve in March. Macro economic conditions have shifted radically from December when the Fed announced its historic first rate hike in a decade. The follow up to that policy decision will not come in March if U.S. fundamentals continue to slowdown.
Currency pairs have been trading close to where they were ahead of the jobs report with the USD starting to bounce back from earlier losses. Canadian data was negative with job losses and a higher unemployment rate so the USD/CAD is rising slightly. The inflation benefits of wage growth are keeping the USD in current levels and could offset some of the negative effects of the other indicator misses this week. EUR/USD broke under the 1.12 price level as the USD appreciates.
The FX market is still trying to price the jobs miss, because there was some positive news. Even with glowing headline job numbers the Fed has been more concerned with wage growth. Hourly wages rose in January by 0.5 percent. The unemployment rate also dropped to 4.9 percent given the strong pace of job gains in 2015. The current unemployment rate in the U.S. is the lowest since November 2007.
The effect of the miss is muted given the impact on an already improbable rate hike by the U.S. Federal Reserve in March. Macro economic conditions have shifted radically from December when the Fed announced its historic first rate hike in a decade. The follow up to that policy decision will not come in March if U.S. fundamentals continue to slowdown.
Currency pairs have been trading close to where they were ahead of the jobs report with the USD starting to bounce back from earlier losses. Canadian data was negative with job losses and a higher unemployment rate so the USD/CAD is rising slightly. The inflation benefits of wage growth are keeping the USD in current levels and could offset some of the negative effects of the other indicator misses this week. EUR/USD broke under the 1.12 price level as the USD appreciates.
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