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EUR/USD Ends Friday with Losses Despite Drop in US Employment

January 8, 2021 by

EUR/USD was on track to end Friday with losses. While the currency pair has attempted to rally after the release of US nonfarm payrolls, which showed a surprise drop in employment, the rally was short-lived. Additionally, other parts of the report were better than expectations.

Nonfarm payrolls dropped by 140k in December, surprising experts who were expecting a small increase of 60k. On a positive note, the previous month’s increase got a revision from 245k to 336k. Unemployment rate was unchanged at 6.7%, whereas economists had forecast an increase to 6.8%. Average hourly earnings rose by 0.8%. That was a significant acceleration from the previous month’s increase of 0.3%. Specialists had predicted a slowdown to 0.2%. (Event A on the chart.)

Wholesale inventories were virtually unchanged on a seasonally adjusted basis in November. Specialists had predicted a decrease at the same 0.1% rate as in the preceding month. (Event B on the chart.)

Consumer credit climbed by $15.3 billion in November, much more than analysts had predicted — $9.0 billion. The previous month’s increase got a negative revision from $7.2 billion to $4.5 billion. (Event C on the chart.)

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