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Poor NFP Don’t Prevent EUR/USD from Falling

February 5, 2016 by

Nonfarm payrolls released on Friday missed analysts’ expectations, but that did not translate into a rally of EUR/USD. In fact, the currency pair dived after the release. It could be explained by the fact that while employment growth was disappointing other parts of the report were positive, especially wage growth. Other economic indicators were also playing in favor of the dollar.

Nonfarm payrolls disappointed the market as they grew by just 151k in January, failing to reach the average forecast level of 189k. On top of that, the previous month’s increase got a negative revision from 292k to 262k. Other parts of the report were good though. Unemployment rate ticked down unexpectedly by 0.1 percentage point to 4.9%. Average hourly earnings grew by 0.5% compared to the predicted rise of 0.3% and no change in December. (Event A on the chart.)

Trade balance deficit rose a bit to $43.4 billion in December from $42.2 billion in November. Analysts’ predictions were not that far off, pointing at $42.9 billion as a likely value. (Event A on the chart.)

Consumer credit rose by $21.3 billion in December after growing by $14.0 billion in November. As for market expectations, they were around $16.1 billion. (Event B on the chart.)

EUR/USD as of 2016-02-05

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