How does Non-Farm Payroll affect EURUSD

Non-Farm payroll measures the change in the number of employed people during the previous month in USA, excluding the farming industry. It is release every month, usually on the first Friday after the month ends, by the Bureau of Labor Statistics. This data is analyzed closely because of its importance in identifying the rate of economic growth and inflation.

If the non-farm payroll is expanding, this is a good indication that the economy is growing, and vice versa.

If the actual data comes in lower than economists’ estimates, forex traders will usually sell U.S. dollars in anticipation of a weakening currency. The opposite is true when the data is higher than economists’ expectations.

Some examples of the Non-Farm Payroll change on EURUSD (15 min chart)

On 3 Jun 2016, Expected 159k, Actual 38k

EURUSD 6 jun 16

Employers in May added the fewest number of workers in almost six years, reflecting broad cutbacks that may raise concern about U.S. growth and prompt Federal Reserve policy makers to put off an increase in interest rates. (Source : Bloomberg)

On 1 Apr 2016, Expected 206k, Actual 215k

EURUSD 1 apr 16

 

On 5 Feb 2016, Expected 189k, Actual 151k

EURUSD 5 feb 16

 The dollar rebounded from a three-month low against the euro after a U.S. employment report showed wage growth that exceeded estimates, bolstering the case for the Federal Reserve to continue raising interest rates this year. (Source : Bloomberg)

 

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *