News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Further your forex knowledge and gain insights from our expert analysts on AUD with our free guide, available today: https://www.dailyfx.com/free-trading-guides?ref-author=social#forecastschoices=AUD?QPID=30472&CHID=9 https://t.co/LHJi7CNFmM
  • $EURUSD https://t.co/KZyXX6p2oI
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Find out about the recent history of ISM data, how to track it, and how to trade its release here: https://t.co/MZtBh8pYG3 https://t.co/1zNf5dpDjU
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/z8z6BNudn5
  • #PELOSI SAYS WE ARE GOING TO PASS THE INFRASTRUCTURE BILL THIS WEEK PELOSI SAYS SHE WILL NEVER BRING TO THE HOUSE FLOOR A BILL THAT DOESN'T HAVE THE VOTES TO PASS $USD $SPX $XAUUSD
  • Short-term uncertainties to keep the pressure on equity markets. Get your weekly equities forecast from @JMcQueenFX here: https://t.co/JLMDPZKvN8 https://t.co/YbdJnwoqj1
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/hqW38VawJl
  • - Unreal atmosphere - Shame about the result, but no complaints - Usyk masterclass - Heavyweight division blown wide open https://t.co/BKCLJTDk9h
  • The USD could still rally a bit from here, but has resistance not far ahead that it will need to overcome if it is to extend to a larger degree. Get your weekly $USD technical forecast from @PaulRobinsonFX here: https://t.co/n0CVWWOJDe https://t.co/0uLjsQ2gwM
  • When it comes to buying and selling forex, traders have unique styles and approaches. Learn about buying and selling forex here: https://t.co/D8DXSAdpqC https://t.co/nfiFAlyYXv
US Dollar Tanks as August NFPs Miss, Unemployment Rate Holds Steady

US Dollar Tanks as August NFPs Miss, Unemployment Rate Holds Steady

Christopher Vecchio, CFA, Omar Habib,

Talking Points:

- Job growth came in below expectations, enough to knock a September rate hike off the table.

- Softer wage growth signals weaker inflation pressures - giving the Fed less of a reason to hike immediately.

- GBP/USD spikes higher as greenback weakens on the news; USD/CAD falls.

August jobs growth, as has seasonally been the case, was slower than that in recent months, but with the headline figure of +151K, compared with expectations of +180K, putting this at the low end of what could be considered the ‘Goldilocks’ zone. While job growth is certainly “slower” on a month-to-month basis, it is still showing a strong trend and that April and May were only slight disruptions. It’s important to keep in mind that, while markets psychologically hold +200K as the threshold, Fed officials, including Fed Chair Janet Yellen and FRB of San Francisco President John Williams have both said that breakeven jobs growth is only around +100K per month.

The rest of the report painted a mixed picture of labor force strength. The unemployment rate and labor force participation rate held steady at 4.9% and 62.8%, respectively. Wage gains were the biggest disappointment, as it slowed down to +2.4% from a revised higher +2.7% on a yearly basis. The underemployment rate held steady at 9.7%. Putting this in context of the recent slide in energy prices in the last weeks of summer, it’s evident there are few signs of strong inflation. Accordingly, this is the type of jobs report that will lead the Fed to a hawkish hold in a few weeks: the data isn’t strong enough to justify a rate hike now, but we’re close.

While almost every headline jobs growth read has been dubbed “most important NFP” for the last year and a half, this one certainly held importance. This report comes on the heels of Fed Chair Janet Yellen saying that recent economic data have supported the case for a rate hike and Vice Chair Stanley Fischer saying that the Fed cannot afford “one and done.” Immediately following the report, Fed funds futures contracts were implying a 20% chance of a rate hike in September, down from 34% ahead of the jobs data. Let’s not mince words: after forecasting four rates hikes in 2016 at their December 2015 meeting, the Fed needs to hike at least once this year – December, most likely, when their last SEP of the year comes out – to save face.

Here are the data hurting the US Dollar this morning:

- USD Unemployment Rate (AUG): 4.9% versus 4.8% expected, from 4.9%.

- USD Change in Non-farm Payrolls (AUG): +151K versus +180K expected, from +275K (revised higher from +255K).

- USD Labor Force Participation Rate (AUG): 62.8% unch.

- USD Average Hourly Earnings (AUG): +2.4% versus +2.5% expected, from +2.7% (y/y).

See the DailyFX economic calendar for Friday, September 2, 2016

Chart 1: GBP/USD 1-minute Chart (September 2, 2016 Intraday)

US Dollar Tanks as August NFPs Miss, Unemployment Rate Holds Steady

Following the data, the US Dollar weakened signifcantly against most major pairs. GBP/USD rose from $1.3255 to 1.3340 and by the time of writing had settled near $1.3318. Elsewhere, US Dollar losses were consistent, with USD/CAD falling from C$1.3096 pre-report to $1.3017 at the time of writing. With FX volatility edging higher again as summer ends, it’s the right time to review risk management principles to protect your capital.

Read more: Preview for August NFPs and Implications for USD-pairs

--- Written by Christopher Vecchio, Currency Strategist and Omar Habib, DailyFX Research

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES