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EUR/USD Retreats After Historically Bad NFP

May 8, 2020 by

EUR/USD was rising today but has reversed its movement after the release of US nonfarm payrolls and is now trading below the opening level. The employment report showed the record decline in jobs but that did not prevent the dollar from gaining on the euro. One of the possible reasons for the greenback’s surprisingly good performance was the fact that the report was not as bad as economists were expecting. Another one was the good news about the US-China trade talks.

Nonfarm payrolls plunged by 20,500k in April. While a huge number by itself, it was lower than the consensus forecast of 22,000k. The previous month’s drop got a revision from 701k to 870k. The unemployment rate jumped from 4.4% to 14.7% but was also lower than the forecast value of 16.0%. Average hourly earnings jumped by 4.7%, whereas economists were expecting the same 0.5% rate of increase as in March. (Event A on the chart.)

Wholesale inventories fell by 0.8% in March, adjusted for seasonal variations. Analysts were expecting the same 1.0% rate of drop as in February. (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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