US Non-Farm Payrolls (NFP)
The US Non-Farm Payrolls (NFP) report showed the US economy adding 206K jobs in June following the 218K expansion the month prior, while Average Hourly Earnings narrowed to 3.9% from 4.1% during the same period to mark the lowest reading since June 2021.
US Economic Calendar – July 5, 2024
A deeper look at the report showed the US Unemployment Rate unexpectedly increasing to 4.1% from 4.0% in May amid an expansion in the Labor Force Participation Rate, with the rise in the participation rate suggesting that discouraged workers are returning to the labor force.
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EUR/USD Chart – 15 Minute
Chart Prepared by David Song, Strategist; EUR/USD on TradingView
Despite the better-than-expected NFP print, EUR/USD whipsawed following the release as it dipped to a session low of 1.0800. Nevertheless, the initial reaction was short-lived as EUR/USD closed the day at 1.0840.
Looking ahead, the US economy is anticipated to add 175K jobs in July while the Unemployment Rate is expected to hold steady at 4.1%, and evidence of a strong labor market may spark a bullish reaction in the Greenback as it raises the Federal Reserve’s scope to keep US interest rates higher for longer.
However, a weaker-than-expected NFP print may push the Federal Open Market Committee (FOMC) to switch gears at its next meeting in September, and signs of a slowing economy may drag on the Greenback as it fuels speculation for an imminent Fed rate-cut.
Additional Market Outlooks
British Pound Forecast: GBP/USD Pending Breakout
US Dollar Forecast: USD/JPY Holds Above Former Resistance
AUD/USD Forecast: RSI Recovers from Oversold Zone
--- Written by David Song, Strategist
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