Falling Nonfarm Payrolls Fail to Support EUR/USD

Nonfarm payrolls is one of the most important indicators of the U.S. economy’s health. Market analysts expected it to grow up in January by 50,000. But in reality it didn’t grow at all, instead it dropped by 17,000. At first, this fueled dollar bears’ activity and drove EUR/USD up close to the historical borders, but then, after release of some other important indicators, it went down to about 1.4800.

The part of the employment report was the U.S. unemployment rate in January — it fell down from 5.0% to 4.9%.

Construction spendings in December fell down by 1.1%, faster than the analysts expected (0.5% drop).

Non-manufacturing ISM report on business activity in January resulted in PMI at 50.7%, showing an increase from the last month’s 48.4% and that it’s significantly better than the forecasted 47.5%.

Index of Consumer Confidence, reported by Reuters and University of Michigan, fell to 78.4 in January from 80.5 in December. Expected value for this indicator was 79.0.

EUR/USD Soars on Disastrous Employment Data

EUR/USD showed a growth of more than 100 pips in one hour immediately after the employment data from the United States were released today. While trading flat and even falling a little during the day, EUR/USD broke through its own record level setting a new historical maximum to 1.4824.

Nonfarm payrolls growth was expected to fall from 94k in November to 70k in December, but the released data was a real catastrophe - just 18k growth. Meanwhile the unemployment rate rose from 4.7% to 5.0% showing that the problems in the U.S. economy are going to be really serious.

ISM services index in December showed a less dramatical decline dropping to 53.9% from 54.1% in November, while a drop to 53.5% was expected.

New Work Places Sink Dollar

For some strange reasons good data on October nonfarm payrolls which came out today had a very bad impact on dollar's pricing against major currencies. With 1.4524 on EUR/USD greenback fell down to its new historical minimums as with Canadian dollar - USD is now worth only 0.9326 CAD.

Monthly nonfarm payrolls is one of the most looked at health barometers for U.S. economy. With a very weak past two month numbers (96k in September; 93k for August), report for October gave a far more better picture of the employment market - 166k new nonfarm payrolls. With the expectation averaging at 80k, this should have added to dollar's value on Forex. Overall unemployment rate remained at 4.7% percents and will hardly move up or down until the end of the year.

Factory orders for September gave another pleasant surprise for dollar bulls increasing by 0.2%. That is compared to -3.5% in August and expectations near -0.4%.

All these positive factors could move EUR/USD back to 1.4300-1.4400 range, but instead it rallied to new historical maximums. In my opinion this can be explained only by historically high oil and gold prices. It can be almost certainly that next week we'll see a correction on EUR/USD, in which today's employment data will play the role of catalyst.

Employment Situation in U.S. Improving

Dollar continues its volatile market dance with Euro currency undecided whether to go south back to 1.4000 or break through to 1.4500. Recent bad fundamental news made positive effect on dollar, most probably because of financial institutions cashing out of stock markets. But today this "bad news - strong dollar" trend was broken.

September nonfarm payrolls came out at 110k - even better than already optimistic expectations of analysts (100k). More than that, extremely bad August result (-4k) was revised towards a much better one (89k), showing that U.S. employment market is still strong and is not dramatically affected by subprime lending crisis.

Among other employment market indicators today came out: unemployment rate - 4.7%, average hourly earnings - 0.4% increase, average workweek - 33.8%.

Nonfarm Payrolls Drop In August

EUR/USD spiked high almost reaching 1.3800 level as the U.S. nonfarm payrolls for the August decreased by 4,000. Nonfarm payrolls is one of the most important measures for the employment market of the United States, which in its turn serves as the indicator of the economy health. A fall by 4k is the lowest monthly value since 2003. This is certainly a bad sign for the overall U.S. economy, which will be (and already was) treated by the financial markets not in the favor of U.S. stocks or USD. Other macroeconomical data became available today too.

Average hourly earning in August grew at the same rate as in July - by 0.3%. Overall unemployment rate remained at 4.6%. All data came out without surprise - at the expected levels.

Business wholesale inventories in July increased by 0.2%, while in June they grew by 0.5% and analysts expected the same growth in July.

EUR/USD Rallies On Bad U.S. Employment Data

Friday, as expected, showed us some real tough action in Forex EUR/USD pair with it hopping high to 1.3800. The first Fridays of the month are often like that - you have an almost flat week of dull trading and then some important news (employment market) come and the whole situation changes fast and completely unexpectedly.
Nonfarm payrolls in July 2007 dropped 34k and came out at 92k level - opposed to 135k expected showing some clear problem which could possible exist in U.S. employment market and thus in the whole economy. Unemployment rate rose to 4.6% from the previous and expected 4.5%, while average hourly earning rose by 0.3% - just as expected.
ISM Services Index was also released today - and it came out to be quite disappointing for the U.S. dollar bulls too - it dropped down from 60.7 to 55.8, while analysts expected at least 59.0 level.