Forex Blog

EUR/USD was growing through the day on Forex today, but after the employment data for March was released there were a sharp but very short-term spike, after which the currency pair started to fall. That’s not a usual and expected behavior for the dollar to grow after the bad job data releases.

Nonfarm payrolls in March dropped 80k approving its declining trend. In February they declined 76k (revised up from 63k). Market participants expected a 50k decline for today’s release. More importantly, the U.S. unemployment rate increased from 4.8% to 5.1% — more than expected 5.0%. It is now above the major upper limit of 5%. The whole report is telling the investors that the recession is not over yet, or at least its echo still affects the real economy of U.S.

Dollar failed to sustain the growth that it has been showing recently and today it fell down against euro to 1.5662 from the opening at 1.5621. Although it tried to rally again earlier today, traders didn’t felt that positive about the U.S. currency.

Factory orders in February disappointed the market participants — they fell 1.3%, while the consensus forecast was at -0.8%. Still this decline was better than the January’s 2.3% fall (revised down from 2.5%).

Crude oil inventories grew significantly in U.S. last week — they increased 7.3 million barrels and are in the upper half of the average range for this time of year now. This news may force oil prices to go down below $100/barrel level in a short-term perspective.

Despite the fact that the ISM PMI for manufacturing sector is still below the significant 50 level and the construction spending continued to fall in February, today’s economic releases inspired the stock market’s rally and the strengthening of the U.S. dollar. EUR/USD fell down from 1.5763 to 1.5582, making this day’s fall already a second largest in the last two weeks.

Construction spending in February decreased at a lesser extent than the majority of the analysts expected — it fell 0.3% against the expected 0.9%. It fell 1.7% in January.

ISM report on manufacturing showed that PMI increased slightly in March and is now at 48.6% up from 48.3% in February, while it was expected to fall to 47.5%.