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EUR/USD Declines Despite NFP Miss

October 2, 2020 by

EUR/USD declined today and remained under pressure after US nonfarm payrolls failed to meet market expectations. The reason for the drop was risk aversion caused by the tweet from US President Donald Trump, who said that he and his wife were tested positive for COVID-19. The tweet overshadows other news, including today’s US economic data.

Nonfarm payrolls rose by 661k in September, far less than analysts had predicted — 900k. The previous month’s increase got a positive revision from 1,371k to 1,489k. Unemployment rate declined from 8.4% to 7.9%, below the median forecast of 8.2%. Average hourly earnings barely rose, increasing by 0.1%, whereas economists had predicted a much bigger increase of 0.5%. The August increase got a negative revision from 0.4% to 0.3%. (Event A on the chart.)

Michigan Sentiment Index rose to 80.4 in September from 74.1 in August according to the final estimate. Market participants were expecting it to remain the same as in the preliminary estimate — 78.9. (Event B on the chart.)

Factory orders rose by 0.7% in August, missing the market consensus of a 1.5% increase. That was a big slowdown from the July 6.5% rate of increase. (Event B on the chart.)

If you have any comments on the recent EUR/USD action, please reply using the form below.

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