US Non-Farm Payrolls (NFP)
The US Non-Farm Payrolls (NFP) report showed a 147K rise in June amid forecasts for a 110K print, while Average Hourly Earnings unexpectedly narrowed to 3.7% from 3.8% during the same period.
US Economic Calendar – July 3
A deeper look at the report showed the Unemployment Rate printing at 4.1% versus forecast for a 4.3% reading even as the Labor Force Participation Rate narrowed to 62.3% from 62.4% in May.
At the same time, the update from the Bureau of Labor Statistics (BLS) revealed that ‘job gains occurred in state government and health care,’ with the report going onto say that ‘the change in total nonfarm payroll employment for April was revised up by 11,000, from +147,000 to +158,000, and the change for May was revised up by 5,000, from +139,000 to +144,000.’
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EUR/USD Chart – 15 Minute
Chart Prepared by David Song, Senior Strategist; EUR/USD on TradingView
The better-than-expected NFP print led to a bullish reaction in the US Dollar, with EUR/USD slipping to a fresh session low (1.1718), but the market reaction was short lived as the exchange rate closed at 1.1757. Nevertheless, the weakness in EUR/USD carried into the days ahead as the exchange rate closed the following week at 1.1690.
Looking ahead, the US is expected to add 110K jobs in July, while the Unemployment Rate is projected to increase to 4.2% from 4.1% during the same period.
With that said, a further expansion in employment may lead to a bullish reaction in the US Dollar as it raises the Federal Reserve’s scope to further combat inflation, but a weaker-than-expected NFP report may drag on the Greenback as it puts pressure on the central bank to pursue lower interest rates.
Additional Market Outlooks
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USD/JPY Fails to Test July High Ahead of Fed Rate Decision
British Pound Forecast: GBP/USD Falls to Fresh Monthly Low
AUD/USD Fails to Test November High Ahead of Australia CPI
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
