The market's expectations were definitely skewed to the upside going into the number and today, they were sorely disappointed. Even though the October figure was revised up slightly and the unemployment rate remain unchanged at 4.7 percent, this number tells us that the US economy is beginning to suffer from slower growth. Currency traders aren't sure how to react to the payrolls bynver as the US dollar remains basically unchanged in the first few minutes of post payroll trading. However, the longer term implication of this morning's number is dollar negative and not positive. For the Federal Reserve, this leaves the door open for a 50bp cut. Stocks are already sharply higher. At the same time, even though we expect dollar weakness to resume, especially against the Euro, the details of the labor market report is not weak enough to take the EURUSD to a new record high before the Federal Reserve interest rate decision.
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