NFP Friday 03/04/2020 at 1:30 pm. Are you ready to trade?


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What to expect from NFP release?


Hello, Trader FX

The U.S. Non-Farm Payrolls Report (NFP), coming out this Friday 03/04/2020 is in the spotlight of Forex traders as the expected report is forecast to be negative by analysts, which will cause crazy volatility in the currency market.



Non-Farm Payrolls Employment

The U.S. labor market remains a pillar of the U.S. economy, with more jobs created last month than expected. Non-farm employment rose by 225k in January compared to expectations of growth of 160k. Although the projected figures are slightly lower than the previous ones, this is not significant at the moment. 
In case this forecast comes true, Forex traders should expect the US dollar to grow against its main competitors.

The unemployment rate in the USA remains at a historically low level of 3.6%, although it is not the lowest. According to the FOMC statements, the virus epidemic does not threaten the U.S. economy, but the regulator cut interest rates in order to reinsure and support the economy. 

In the last release of the data, the movement on the EUR/USD currency pair at the moment made 20 points.
But it also caused a general mid-term movement of 194 points.
The more interesting course of events took place on the asset, which closely correlates with the EUR/USD currency pair - gold. At the moment of publication, the asset prices rose by 122 points or $12 per ounce.

Last data: 273K
Consensus Forecast: -100K

The U.S. labor market remains a backbone of the U.S. economy, with more jobs created last month than expected. But the spread of the Coronavirus pandemic has forced the government to take decisive action that will limit the spread of the infection as much as possible. As a result, businesses are suspending their jobs and quarantining and dismissing employees. The U.S. as a whole is suffering huge losses because of this, no matter how much Fed tries to support the U.S. economy, forced measures in the fight against the pandemic cannot but affect the U.S. labor market.


U.S. Average Hourly Earnings YoY

Last data: 0.3%
Consensus forecast: 0.2%

This indicator shows the change in the average hourly wage level for major industries, except agriculture.

Unemployment Rate

Past data: 3.5%
Consensus forecast: 3.8%

The unemployment rate in the USA remains at a very low level of 3.5%. Even with tough countermeasures against the spread of coronavirus, mass quarantine, the U.S. has managed to keep the unemployment rate at a minimum. Although the data is expected to deteriorate, this is not a critical level of job losses and the U.S. government is trying to help U.S. companies to cope with the crisis in any way while keeping the jobs of their employees.

In the previous release of data, the movement on the EUR/USD currency pair at that moment made 32 points:
But also causing a total short-term movement of 191 points.

More interesting course of events took place on the asset, which closely correlates with the currency pair EUR/USD - gold, at the moment of publication gold prices fell by 425 points!

To keep your open positions and survive during the time
of market volatility due to news release, make sure you have enough funds in your account.




Keep in mind:
  • During the NFP announcement, expect high volatility, especially across USD pairs.
  • Market sentiment can really affect currency movements. What traders expect from the report has as much impact
    as the actual released data, if not greater.
  • A higher figure than the one registered during the previous month signifies an improvement in employment numbers. This, as well as the release of a higher-than-expected figure, means an increase in the number of jobs created and are positive for both the U.S. economy and the dollar.
  • A lower figure than the one registered during the previous month, as well as a lower-than-expected figure, usually have a negative impact on the dollar as they demonstrate a drop in employment numbers.
  • Remember that the sudden spike observed across the charts of many currency pairs upon the release of the NFPs
    is usually followed by a period during which the market tries
    to recover and return to its initial price levels.
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Risk Warning:Forex and CFD trading carry a high degree of risk. As such they may not be suitable for all investors. Investors should ensure they fully understand the risks associated with CFD trading before deciding to trade. Investors may choose to seek independent advice and should not risk more than they are prepared to lose.
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