Welcome to another monthly review of the US Non-Farm Payroll. The EUR/USD currency pair often reacts strongly to this economic event and hence it is crucial we understand it.
In the previous US Non-Farm Payroll, the NFP was better than expected. Employment increased and the unemployment rate fell. This was very positive for the sentiments toward the US economy. Risk appetite of investors and traders increased.
Looking at the EUR/USD chart above, we note that the currency pair was volatile after the announcement of the US NFP figures. With a range of over a hundred pips, the currency pair spiked upwards only to settle in a tight range before plunging further.
America's Non-Farm Employment Change was better than expected. It clocked an increase of 244k. This contributes greatly to the growing belief that the US job market is improving. A disappointment though is the overall unemployment rate which increased back to 9%.
As the conflicting figures probably cancelled out extreme spikes on either side, it resulted in a tight range before plunging further. The strengthening of the US Dollar probably resulted from another development in the market. The speculation that Greece may pull out of the Euro currency.
As the market grows accustomed to seeing positive figures from the US Non-Farm Payroll month after month, one can only imagine what will happen if a negative month is encountered.
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