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EUR/USD Drops After NFP Fall, Rebounds Later

EUR/USD was moving mostly sideways ahead of the release of nonfarm payrolls and dropped after the report came out, even though it showed the first drop of US employment in seven years. Yet markets were unfazed as the report mentioned that the result was affected by the damage done by two hurricanes, meaning that the decline does not reflect the underlying strength of the US economy. What is more, other components of the data were very good. Yet the currency pair bounced sharply at 17:30 GMT. There were various speculations as to why that happened. Some analysts attributed the jump to fear of a conflict between the United States and North Korea as, according to reports, the isolated nation prepares for yet another nuclear missile test.

Nonfarm payrolls fell by 33k in September. That was even worse than the extremely pessimistic predictions that were promising an increase by 82k. On a positive note, the previous month’s increase was revised from 156k to 169k. Continuing with the positive news, unemployment rate dropped unexpectedly from 4.4% to 4.2%. And on top of that, average hourly earnings rose by 0.5%, exceeding the median forecast of 0.3% and the August revised reading of 0.2%. (Event A on the chart.)

Wholesale inventories increased 0.9% in August, while analysts were expecting the same 1.0% rate of growth as in July. (Event B on the chart.)

Consumer credit rose by $13.1 billion in August, trailing the average forecast of $15.8 billion. On top of that, the previous month’s increase was revised down from $18.5 billion to $17.7 billion. (Event C on the chart.)

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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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