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NFP Surprises Positively, EUR/USD Reaction Surprises Too

December 6, 2013 by

Today’s US nonfarm payrolls made a nice surprise to dollar bulls, showing good employment growth and fueling speculations about quantitative easing tapering. Yet EUR/USD made a surprise too: it did not crash down, as one might expect, but traded sideways for a time and now took off higher. It is even more surprising considering that most other reports from the United State were also good.

Nonfarm payrolls positively surprised traders last month and this month was no different: they showed growth by 203k in November that followed the revised October increase by 200k. Market participants expected growth by about 180k. Moreover, the unemployment rate stood at 7.0%, down from 7.4%, while consensus forecast was at 7.3%. (Event A on the chart.)

Personal income fell 0.1% in October, missing analysts’ estimate of 0.3% growth. Income was up 0.5% in September. The prediction for personal spending also promised 0.3% increase and this time forecasters were right on the mark. Expenditure increased 0.2% in September. (Event A on the chart.)

Michigan Sentiment Index rose from 75.1 in November to 82.5 in December (preliminary), exceeding expectations of 76.2. (Event B on the chart.)

Consumer credit increased by $18.1 billion in October from September. The rate of growth outpaced forecasts of $14.6 billion. The September increase was revised positively from $13.7 billion to $16.3 billion. (Event C on the chart.)

EUR/USD for 2013-12-06

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