Forex Blog

EUR/USD spiked high almost reaching 1.3800 level as the U.S. nonfarm payrolls for the August decreased by 4,000. Nonfarm payrolls is one of the most important measures for the employment market of the United States, which in its turn serves as the indicator of the economy health. A fall by 4k is the lowest monthly value since 2003. This is certainly a bad sign for the overall U.S. economy, which will be (and already was) treated by the financial markets not in the favor of U.S. stocks or USD. Other macroeconomical data became available today too.

Average hourly earning in August grew at the same rate as in July - by 0.3%. Overall unemployment rate remained at 4.6%. All data came out without surprise - at the expected levels.

Business wholesale inventories in July increased by 0.2%, while in June they grew by 0.5% and analysts expected the same growth in July.

Friday, as expected, showed us some real tough action in Forex EUR/USD pair with it hopping high to 1.3800. The first Fridays of the month are often like that - you have an almost flat week of dull trading and then some important news (employment market) come and the whole situation changes fast and completely unexpectedly.
Nonfarm payrolls in July 2007 dropped 34k and came out at 92k level - opposed to 135k expected showing some clear problem which could possible exist in U.S. employment market and thus in the whole economy. Unemployment rate rose to 4.6% from the previous and expected 4.5%, while average hourly earning rose by 0.3% - just as expected.
ISM Services Index was also released today - and it came out to be quite disappointing for the U.S. dollar bulls too - it dropped down from 60.7 to 55.8, while analysts expected at least 59.0 level.

Some important macroeconomic data was released in U.S. today - employment situation in June from the Bureau of Labor Statistics. As it was expected by the financial analysts, the overall unemployment rate in June remained on 4.5% level - which is quite low and is a good indicator for the U.S. economy. Non-farm payrolls in June reached 132,000 which is 7,00 higher than the experts’ estimations. May non-farm payrolls were also revised towards the better side - 190,000 from 157,000. Average hourly earnings came out at 0.3% level (as expected), but May data was revised from 0.3% to 0.4%. Overall, this is a good news for the U.S. economics and dollar as well. The Forex market isn’t playing this data yet (or it won’t) - EUR/USD returned to its 1.3600-1.3650 range, and no serious movement can be seen.

EUR/USD broke through 1.3400 today on Forex market - showing a new 7-week low. Good macroeconomic data from U.S. was the reason for this break-through. Nonfarm payrolls - a major employment indicator of the U.S. economy - increased by 157,000 in May (22 thousands more than expected), while ISM Index - reported an increase by 0.3% up to 55.0% (against 54.0% expected). ISM Index means a lot in the U.S. economy because it describes its most powerful industries, and greatly influences FOMC rate decisions. Now it is quite possible to see an increase in U.S. interest rates by 0.25% this Fall, in my opinion.