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EUR/USD Climbs After Awful NFP Report

February 5, 2021 by

EUR/USD was rising slowly during Friday’s trading session but accelerated the pace of the rise sharply after the releases of disastrous US nonfarm payrolls. While the unemployment rate fell unexpectedly, average hourly earnings and especially employment growth were extremely disappointing. It is surprising to see after the good ADP employment report released on Wednesday. While two reports are not always in sync, the divergence is rarely so big. As for other US macro releases, the trade balance improved slightly while consumer credit failed to meet expectations.

Nonfarm payrolls rose by just 49k in January, missing the already low expectations of a measly 85k increase. And on top of that, the decrease in December got a big negative revision from 140k to 277k. Unemployment rate dropped from 6.7% to 6.3%, whereas market participants were expecting it to stay unchanged. Average hourly earnings rose by 0.2%, missing the median forecast of a 0.3% increase. On the positive side, the previous month’s gain got a revision from 0.8% to 1.0%. (Event A on the chart.)

Trade balance deficit narrowed to $66.6 billion in December from $69.0 billion in November, matching market expectations. (Event A on the chart.)

Consumer credit increased by $9.7 billion in December, missing the market consensus of a $12.1 billion increase. November figure got a negative revision from $15.3 billion to $13.9 billion. (Event B on the chart.)

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