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- U.S. Non-Farm Payrolls (NFP) to Increase 205K in February, Unemployment Rate to Narrow to Annualized 4.0% from 4.1%.

- Average Hourly Earnings to Slow to 2.8% per Annum from 2.9% in January. Will Chairman Jerome Powell and Co. Continue to Project a Neutral Fed Funds Rate of 2.75% to 3.00%?

Trading the News: U.S. Non-Farm Payrolls (NFP)

DailyFX Calendar

Updates to the U.S. Non-Farm Payrolls (NFP) report may curb the recent decline in EUR/USD[1] should the data prints dampen bets for four Fed rate-hikes in 2018.

Even though the economy is expected to add 205K jobs in February, a slowdown in Average Hourly Earnings may limit the Federal Open Market Committee’s (FOMC) scope to implement a more aggressive hiking-cycle as the central bank struggles to achieve the 2% target for inflation. Keep in mind, the data may do little to deter the FOMC[2] from raising the benchmark interest rate in March as ‘the Committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate,’ but a batch of lackluster developments may push Chairman Jerome Powell and Co. to implement a dovish rate-hike as ‘some participants saw an appreciable risk that inflation would continue to fall short of the Committee's objective.

At the same time, a series of positive developments may keep EUR/USD under pressure, with the pair at risk of facing a larger correction as the European Central Bank (ECB) refuses to deliver a detailed exit-strategy[3].

Impact that the U.S. NFP report has had on EUR/USD during the previous print

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

JAN

2018

02/02/2018 13:30:00 GMT

180K

200K

-35

-36

January 2018 U.S. Non-Farm Payrolls (NFP)

EUR/USD 5-Minute Chart

EUR/USD 5-Minute Chart

The U.S. Non-Farm Payrolls (NFP) increased 200K in January after expanding a revised 160K the month prior, while the jobless rate held steady at an annualized 4.1% for the fourth consecutive month. A deeper look at the report showed the Labor Force Participation rate was also unchanged at 62.7%, while Average Hourly Earnings increased 2.9% per annum amid projections for a 2.6% print.

The U.S. dollar[4] gained ground following the batch of better-than-expected prints, with EUR/USD pulling back from the 1.2500 region to end the day at 1.2455. Want More insight? Join the DailyFX Team Live[5] to cover the NFP

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