Fed Chair Jerome Powell’s comments on the Jackson Hole Symposium resulted in the worst weekly candle in US500 since June.
The US NFP Update: What to Wait for?
What will happen?
The US Bureau of Labor Statistics will announce average hourly earnings, nonfarm employment change (NFP), and the unemployment rate on May 6, at 15:30 MT time. This data is published monthly, usually on the first Friday of the month. Average hourly earnings and nonfarm payrolls don’t include the farming industry due to its seasonality. The unemployment rate is a key indicator of overall economic health that helps analysts assess the US economic situation.
How can USD react?
Despite worries about inflation and the Russian-Ukrainian conflict, US businesses are still hiring at full capacity. More people are returning to the labor market, including retired people, probably attracted by higher wages. In March, the central bank raised interest rates by a quarter of a percentage point for the first time since 2018 to curb high prices.
The previous release encouraged the growth of the USD in many pairs. For example, the GBPUSD lost almost 600 points. The unemployment rate was 3.7% vs. 3.6% expected, and nonfarm payroll was 431K VS. 492K. For the last six months, the forecast used to be quite different from the “actual,” so the results are always difficult to foresee.
How to trade on the US NFP release?
If NFP is higher than expected, the USD will rise. If NFP is lower than expected, the USD will fall. The unemployment rate situation is the opposite: the lower the indicator, the better for the US currency.
- If actual numbers of NFP beat expectations, then the USD will go up.
- Otherwise, it will fall.
Check the video from our analyst to learn more about a NFP trading strategy!
Check the Economic Calendar.
Instruments to trade: EURUSD, USDCAD, USDCHF.
Last week several important economic updates influenced the Forex market. US preliminary GDP fell less than expected (0.6% actual vs. 0.7% forecast). Below you will find the key events to trade on during the week from August 29 to September 2.
The United States will publish the Inflation Rate and Core Inflation Rate, also known as US CPI and Core CPI, on August 10 at 15:30 GMT+3.
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Every week we expect many interesting events that can shake the market.