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
More View more
Real Time News
  • Gold (XAU/USD) has risen above the $1,800 psychological level, prior resistance that had held bulls at support for some time. Get your $XAUUSD market update from @Tams707 here:https://t.co/yNtDDSORQI https://t.co/4zfOjqv1Wx
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 94.21%, while traders in France 40 are at opposite extremes with 78.50%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/spvjyxhNtz
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Gold: 0.00% Silver: -0.44% Oil - US Crude: -3.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ocFjgpmVxG
  • Anyone else seeing a possible inverse H&S pattern shaping up here? This range has been pretty stubborn though and likely needs a big catalyst to ignite a directional breakout. Covid, NFPs, and Fed tapering stand out as top candidates for swaying #SP500 risk appetite. $SPY $SPX https://t.co/v96OpUj4yc
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.42% 🇬🇧GBP: -0.05% 🇨🇦CAD: -0.06% 🇦🇺AUD: -0.22% 🇨🇭CHF: -0.27% 🇯🇵JPY: -0.45% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/08zO57ZXTy
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.02% France 40: 0.01% FTSE 100: -0.02% US 500: -0.39% Wall Street: -0.81% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/M6xK3n7eGq
  • USD rallying today amid an otherwise bad day for 'risk FX' - and that's par for the course for August. Latest seasonality report: https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/08/03/monthly-forex-seasonality-august-2021-great-for-gold-bad-for-risk-fx.html
  • GBP/USD is continuing its modest climb higher that began a fortnight ago, and could hit the psychologically important 1.40 level soon. Get your $GBP market update from @MartinSEssex here:https://t.co/p7X6envgGA https://t.co/N24E4oTDxs
  • EUR/USD Nosedives on Record US Services PMI, Clarida Remarks -via @DailyFX Link to Analysis - https://www.dailyfx.com/forex/market_alert/2021/08/04/eur-usd-nosedives-on-record-us-services-pmi-clarida-remarks.html $EURUSD $DXY #Forex
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.46% 🇨🇦CAD: -0.00% 🇬🇧GBP: -0.02% 🇪🇺EUR: -0.17% 🇨🇭CHF: -0.24% 🇯🇵JPY: -0.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/n6oAzR0k7T
DXY Little Changed After Mixed US NFP Report

DXY Little Changed After Mixed US NFP Report

Justin McQueen, Analyst

NFP Analysis and Talking Points

  • US Nonfarm Payrolls rose by 164k in April, missing expectations of 192k expected; Prior month revised to 135k from 103k.
  • US Average Hourly Earnings pace slowed to 2.6% Y/Y and 0.1%, underperforming expectations of 2.7% and 0.2% respectively.
  • US Unemployment Rate fell to 3.9%, lowest level since December 2000

NFP Report Review

US Bureau of Labor Statistics reported total nonfarm payroll (NFP) employment expanded by a modest 164k jobs in April, which fell short of expectations of 192k. However, the headline figure saw an upward revision to 135k from 103k, while the 2-month net revision had been +30k. The US unemployment rate fell 0.2ppts to the lowest level since December 2000 at 3.9%, which also beat expectations of 4%.

The Fed focussed wage data had fallen short of expectations with the Y/Y at 2.6% (Exp. 2.7%) and the M/M at 0.1% (Exp. 0.2%), as such, this reduces fears over a potential overshoot in inflation with the figures indicating a modest build in inflationary pressures in the US economy. Overall, today’s jobs report is further confirmation that the labour market is showing signs that it is tightening and remains robust.

Market Response

In an immediate response to the report, the USD index fell to session lows on the back of the weaker than expected headline print, while the wage data also underwhelmed expectations, which in turn led to a slight unwind of bets that there will be three additional rate hikes this year. However, the selling pressure in the USD was short-lived given that the softer readings had been met with a better than expected unemployment rate of 3.9% (Dec’2000 low) with today’s jobs report somewhat mixed.

DXY Price Chart 1: 1-MINUTE TIME FRAME (MAY 4 INTRA-DAY)

DXY Little Changed After Mixed US NFP Report

Chart by IG

Implications on FOMC Monetary Policy Outlook

Ultimately, this report will unlikely provide a significant ramification for the FOMC’s tightening path in the near-term with a 25bps interest rate hike at the June meeting fully priced in, while in terms of further down the line, according to the CME Fedwatch, the probability of three more rate hikes saw a marginal fall to 37.9% from 40%. (prior to the data).

DXY Little Changed After Mixed US NFP Report

Source: CME

See our Q2 FX forecast to learn what will drive the currency through the quarter.

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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

DISCLOSURES