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So much for expecting a strong U.S. jobs report! The actual NFP figure released last Friday turned out to be a huge disappointment, particularly for dollar bulls who were expecting it to fuel Septaper talks.

As it turns out, the U.S. added only 169K jobs in August, lower than the estimated 178K increase.

To make things worse, the July figure was revised down from 162K to 104K, contributing to a total of 74K in downward revisions for the past few months.

At first, the jobless rate’s decline from 7.4% to 7.3% seemed like good news, but market watchers soon realized that it was merely a result of a drop in participation rate from 63.4% to 63.2%. This is its lowest level since August 1978!

All in all, these painted a very grim picture of the U.S. jobs market, leading traders to have doubts about the Fed’s Septaper plans.

However, some analysts insist that the Septaper will still push through, as the Fed isn’t likely to change its mind about an upbeat economic outlook based on a single piece of data.

Aside from that, the Fed would risk undermining its credibility if it takes a rain check on its bond purchases reduction plan this month.

Don’t expect any fireworks from the Fed though. If you remember, just this June, Bernanke said that the central bank is waiting for the unemployment rate to go down to around 7% before it even considers reducing its stimulus.

More importantly, Bernanke specified that factors such as the participation rate and the sustainability of jobs growth will also be considered.

If anything, the weak jobs data would only make the Fed members’ debates on how to go about their tapering program more interesting. Staunch supporters of stimulus such as voting members Eric Rosengren and Charles Evans are waiting for more data or for monthly payrolls to reach at least 200,000.

On the other hand, anti-stimulus members like Esther George are already calling for a $15 billion reduction from the Fed’s $85 billion monthly stimulus.

Based on Friday’s price action, market geeks are already adjusting their expectations. Word around the hood is that they’re expecting the Fed to deduct as little as $5 billion in September, which is probably why the dollar got sold off heavily against the other major currencies.

With Septaper speculations mostly priced in, we might see more dollar weakness if the Fed implements Septaper-lite. Ditto if the Fed delays tapering until later this year, since the new Fed head honcho will have a harder time at stabilizing the Fed’s schedule.

Still, these are all speculations until we hear from the Fed. But what do you think? Will the Fed pull the trigger next week?