US Non Farms Takes Centre Stage

By Luke in Currency Articles | December 3, 2010 18:25 | Tags: , , , , , ,

Nonfarm payrolls in the US advanced 39,000 in November after climbing 172,000 last month amid economists’ forecasts of a 150,000 gain. The US unemployment rate rose to 9.8 percent to mark the highest level since April of this year. The breakdown of the NFP report indicates that private payrolls rose 50,000, marking the lowest reading since January. More industries did however added onto payrolls than not.

Manufacturing came in today at -13 from -11 in October as manufactures cut jobs for the fourth month in a row. Today’s report surprised the currency markets as the string of positive data in the last few weeks prior to the NFP report today indicated that the situation would be better than this.

As a result of the surprise, the Dollars momentum seems to have fundamentally shifted back towards risk appetite. Stocks have given back some of their gains from the last few days and it now seems that the Fed’s reasoning for their recent decision to increase asset purchases are more justified.

There is now a significant argument for renewed US Dollar weakness, technically it looks as though we have seen a reversal on cable and a retest of 1.60 could be on the cards next week. The pound has not performed particularly well in the last two trading days of this week which is somewhat of a surprise in the absence of poor economic data. It will be interesting to see what happens moving forward into next week, we would expect a tentative resurgence in Sterling against the USD and Euro, and ongoing US Dollar weakness.

Best Regards
Luke Zorab

Torfx Currency Dealer

If you have any questions or queries with reference to the markets and have a requirement for currency please don’t hesitate to contact me.
“Any opinions expressed in this document are those of TorFX analysts. Any analysis and/or forecasts provided are aimed at helping clients understand market conditions and developing trends. Clients are wholly responsible for their own trading decisions.”

About Luke

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