feedback
FxProUpdates

Nonfarm payrolls give dollar a boost

Today’s US non-farm payroll has exceeded expectations and shown a good bounce from last month’s unexpectedly weak figure. The labour data that we’d seen so far this week complements today’s good data as we saw a better than expected ADP figure on Wednesday and yesterday’s weekly initial jobless claims were well below the four week average.

The US economy is steadily improving month by month and investors have been readying themselves what’s coming in the form of higher interest rates, as the dollar continues to trade higher striving for a new equilibrium. Today’s number of 248k is well above the six month average figure around 180k and higher than the one month average of 219k so it comes as little surprise to see the initial reaction of dollar strength sending EURUSD and GBPUSD lower, with the latter now heading to test the 1.6000 level and at its lowest since November 2013.

Just when investors had been becoming nervous about global growth prospects with October so far seeing a broad sell off in equity markets, today’s figure could put a line in the sand for the indices. The FTSE has bounced strongly today retaking the 6500 level and at the time of writing we expect the Dow Jones to open higher by some 100 points. This nonfarm payroll is encouraging for both the dollar bulls and those bullish equity investors that have seen the indices bounce strongly, even though today’s figure means monetary policy tightening maybe closer than expected.

5/5(1)