The markets’ reaction has been slightly mixed to the US NFP announcement with the USD bulls clearly disappointed that the overall jobs number was an unimpressive 173,000. The low number of jobs created by the US economy last month clearly weakens the argument for a US interest rate rise in September, especially considering several spokespeople from the Federal Reserve have continually stated that any rate hike would be data dependent, and that there is no stronger measure of data than a NFP release.
Although the number of jobs created is not stunning enough to get the USD bulls jumping, there are positives from the jobs report such as the unemployment rate falling to a milestone seven‐year low and improved wage growth. This encouraged some signs of momentum for the USD, but the overall conflicting results will lead to the USD struggling to find proper direction.
Overall, the conclusion to take from the combined data is that the argument for a US interest rate rise this month has weakened. It’s not completely impossible, but the markets really need some strong US data before the FOMC meeting to reinforce expectations that the Fed can raise rates in September.
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