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Take a break from trade wars this Friday: the anticipated release of non-farm payrolls for March could establish a trend for the dollar.

Might there be a repeat of March’s positive figure?

  1. The NFP measures the change in numbers of employees in the USA.
  2. Seen as a key economic indicator, new jobs help to determine consumer spending.
  3. Last month’s figure dramatically exceeded predictions by 113,000.
  4. With 190,000 predicted, USD could strengthen with a good result.

Get ready for this month’s game changer!

US Nonfarm Payrolls (NFP) on Friday, April 6th, 2018 at 12:30 GMT.

The unemployment rate is at the lowest level of more than a decade (4.1%).

However, this month analysts expect it to further drop to a 4.0% level.

Last month, the US NFP has crushed expectations (200K), with the US economy creating 313K new jobs.

This month, the consensus anticipates a lower reading of 203K.

But are markets going to be taken by surprise once again this month?

Market experts are divided in 2 groups:

  • Bullish factors for the USD
    1. Fed anticipates a 3.8% unemployment rate by the end of 2018.
    2. Initial unemployment claims slightly increased in March but are below the 300.000 threshold, indicating a strong labour market.
  • Bearish factors for the USD
    1. The White House reshuffle may lead to market uncertainty following the resignation of its Chief Economic Adviser.
    2. Markets are still worried about US tariffs and a potential trade war.

What do you think? Will the EURUSD rise or fall?

What is NFP?

The non-farm payrolls released by the US Bureau of Labor Statistics presents the number of new jobs created during the previous month, in all non-agricultural business.

The monthly changes in payrolls can be extremely volatile, due to its high relation with economic policy decisions made by the Central Bank.

Job creation is the foremost indicator of consumer spending, which together with the Average Hourly Earnings data will help the Fed to determine its monetary policy in relation to the inflation in the country.

Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish), although previous months reviews and the unemployment rate are as relevant as the headline figure, and therefore market’s reaction depends on how the market prices them all.

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