Lackluster Non-Farm Payrolls (NFP) Report To Fuel EUR/USD Rate Rebound

TRADING THE NEWS: U.S. NON-FARM PAYROLLS (NFP)

Even though the U.S. Non-Farm Payrolls (NFP) are anticipated to increase another 198K in November, another 3.7% print for Average Hourly Earnings may drag on the dollar as it dampens the outlook for growth and inflation.

Image of DailyFX economic calendar

Signs of limited wage growth may spark a bearish reaction in the greenback as it undermines the Federal Reserve’s scope to further embark on its hiking-cycle, and a batch of lackluster data prints may fuel the recent rebound in EUR/USD as market participants scale back bets for above-neutral interest rates.

In turn, the Federal Open Market Committee (FOMC) may deliver a dovish rate-hike at the next interest rate decision on December 19, but another better-than-expected NFP report may weigh on EUR/USD as it puts pressure on Chairman Jerome Powell & Co. to extend the hiking-cycle. 

IMPACT THAT THE U.S. NFP REPORT HAS HAD ON EUR/USD DURING THE PREVIOUS RELEASE

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

OCT

2018

11/02/2018 12:30:00 GMT

200K

250K

-27

-48

October 2018 U.S. Non-Farm Payrolls (NFP)

EUR/USD 5-Minute Chart

Image of eurusd 5-minute chart

U.S. Non-Farm Payrolls (NFP) increased 250K in October after expanding a revised 118K the month prior, while the Unemployment Rate held steady at 3.7% per annum for the second consecutive month. A deeper look at the report showed an unexpected pickup in the Labor Force Participation Rate, with the figure climbing to 62.9% from 62.7% in September, with Average Hourly Earnings also picking up to 3.1% from 2.8% during the same period.

The U.S. dollar gained ground following the positive development, with EUR/USD slipping below the 1.1400 handle to close the day at 1.1387. 

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