NFP: USD negative arguments weighed more heavily and dominated – Commerzbank

The Dollar eased quite notably following the publication of Nonfarm Payrolls. Ulrich Leuchtmann, Head of FX and Commodity Research, analyzes USD reaction.

Gleanings from the US labor market report

The USD bears were able to refer to the fact that the NFP, the number of new jobs outside farming, was much lower than the vast majority of analysts had expected and that the previous month’s result also had to be revised downwards.

And the USD bulls were able to state that major surprises in the NFP data are not unusual and that 187K new jobs were quite good going, that the Unemployment Rate recorded a surprise MoM fall and that average hourly earnings rose a little more significantly than expected.

Anyone who thinks that the USD positive arguments were not only more numerous but also more convincing would have been in the minority on the FX market on Friday.

EUR/USD had traded in the lower 1.09 area prior to the publication, DXY above 102.50. Both levels were close to the extremes of the previous week. It therefore cannot come as a surprise that the USD negative arguments weighed more heavily and dominated – despite the doubtlessly good arguments pointing in the other direction.