Article Highlights

  • U.S. economy added 215K jobs in Mar vs. 206K forecast
  • U.S. unemployment rate rose from 4.9% to 5.0%
  • U.S. average hourly earnings up by 0.3% vs. 0.2% estimate
  • U.S. ISM manufacturing PMI rose from 49.5 to 51.8 in Mar
  • U.S. construction spending down by 0.5% vs. projected 0.2% gain
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It was all about the NFP on last Friday’s U.S. trading session, as forex market watchers reconsidered the idea of a potential Fed hike in the coming months.

Major Events:

U.S. March non-farm payrolls release – The latest jobs report was mostly stronger than expected, as hiring gains outpaced the consensus and wage growth was seen. The economy added 215K jobs in March, higher than the estimated 206K reading but lower than the earlier 242K figure. Meanwhile, average hourly earnings climbed 0.3% versus the projected 0.2% uptick, indicating a rebound from the earlier 0.1% decline.

However, the unemployment rate ticked up from 4.9% to 5.0% instead of holding steady as expected. As Forex Gump explained in his NFP review article, this rise was actually spurred by a pickup in the participation rate, which basically means that more Americans are returning to the labor force to resume their job hunt.

Risk off on rate hike expectations? – U.S. equities sold off upon seeing the solid jobs figures for March, suggesting that investors might be anticipating an earlier Fed rate hike to push borrowing costs higher. Still, stock indices were able to pull up from their dive towards the end of the day, as market participants probably figured that FOMC members are likely to wait for more signs of labor market strength before tightening again.

Major Currency Movers:

USD – The U.S. dollar initially rallied upon seeing the upbeat NFP results but soon returned its gains for the day.

EUR/USD dipped to a low of 1.1335 before recovering close to 1.1400, GBP/USD fell from the 1.4300 levels to a low of 1.4171, USD/JPY popped up to a high of 112.46 then retreated below the 112.00 handle, and USD/CHF tossed and turned around .9600.

GBP – The pound was one of the weakest performing currencies of the day, as it failed to join its forex peers in recovering before the markets closed.

GBP/JPY broke below the 159.00 handle before consolidating, EUR/GBP climbed past the .8000 handle to a high of .8020, GBP/NZD is down to 2.0615, and GBP/AUD is testing support at the 1.8500 mark.

Watch Out For:

  • 2:00 am GMT: Australia MI inflation gauge
  • 2:30 am GMT: Australian building approvals (2.1% expected, -7.5% previous)
  • 2:30 am GMT: Australian retail sales (0.4% expected, 0.3% previous)
  • 2:30 am GMT: Australia’s ANZ job advertisements. A leading indicator of hiring gains.

See also:

Asian Session Recap

London Session Recap

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