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Dollar Volatile after Employment Situation Worsens

April 4, 2008 by

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.

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