Market Snapshot – NFP Disappoints as Euro Corrects

NFP and Wages Data Disappoint

The NFP and the wages data were supposed to drive the dollar today and we did get a brief time when that happened. Both the NFP and the wages data came in much weaker than expected and to an extent, this was something that some part of the market did expect. The NFP tends to be weak in August but what should have surprised the market was the weakness in the wages as well. The NFP came in at 156K and even the employment figures from last month were revised lower and this led to a large round of weakness in the dollar. This should have basically buried all expectations of a rate hike from the Fed for this year and this is not good news for the dollar.

ECB Unhappy with Strong Euro

But almost immediately after the weak NFP figures were announced, we got reports that the ECB would not be considering tapering till atleast December of this year. This would have disappointed the euro bulls as it made it amply clear that the ECB was not happy with the current bull run in the euro and had to do some jawboning to keep it under control atleast in the short term. This led to a reversal of the entire upmove in the euro and now trades in a very weak manner near its range lows.