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HOW NONFARM PAYROLLS (NFP) IMPACTS THE US DOLLAR & USD PRICE VOLATILITY

  • The US Dollar[1] typically exhibits heightened volatility around the monthly release of nonfarm payrolls data and places USD[2] price action at risk of experiencing outsized moves
  • Realized volatility in the US Dollar Index and its major currency pairs[3] around NFP[4] reports tends to run above-average as forex traders reassess the US economy and jobs market
  • Read more on Trading the NFP Report[5] or check out this insight on the Federal Reserve[6] for details on how nonfarm payrolls data can impact FOMC[7] interest rate decisions

Currency volatility[8], which is characterized by the frequency and magnitude of changes in a currency’s value, tends to rise during times of heightened market uncertainty. The periodical release of US jobs data – like nonfarm payrolls – in addition to several other high-impact economic reports have historically served as primary catalysts for heightened market activity.

Read More – US Dollar, Gold & Dow Jones React to Catastrophic NFP Report[9]

Referred to less formally as NFP or NFPs, monthly nonfarm payrolls data is published on the first Friday of each month at 8:30 AM EST by the Bureau of Labor Statistics (BLS[10]). Due to the 04 July Independence Day holiday, however, the upcoming NFP report for June 2020 will be released Thursday, July 02 at 12:30 GMT. This closely watched jobs report provides market participants with a detailed summary of the employment situation and broader labor market conditions across the United States.

US DOLLAR VOLATILITY TYPICALLY ELEVATED IN RESPONSE TO THE MONTHLY NFP REPORT (CHART 1)

NFP: Nonfarm Payrolls Drives the US Dollar & Forex Volatility

In consideration of the Federal Reserve (Fed) and its

Read more from our friends at Daily FX