NFP

    NFP Comes in Strong But Markets Yet to Make Up Mind

    4 months agoByColin First

    The key data point in the first week of any month has always been the NFP data. Sometimes the data is anticipated a lot but turns out to be a damp squib while at other times, no one is much bothered about the data as the market knows what that data will lead to anyway. This week, the data has been well anticipated mainly due to the fact that the data in the previous month was weak. Not only the NFP data but almost all the data from the US over the past month or so has been weak due to which the dollar has been on the backfoot.

    Dollar Gets a Boost

    The ADP data yesterday pointed to a weak NFP data today and that had led to a lot of fear among the dollar bulls but they would have been relieved today to see the NFP come in at a much stronger than expected value of 222K against the expected value of 178K. This has finally seemed to reverse the trend of bad data and that in itself would be a victory for the dollar bulls. The reaction so far, in the markets has been choppy with many dollar based pairs not sure on which direction they should be taking.

    EURUSD M15
    EURUSD M15

    Though the data is dollar positive, the other major currencies have also managed to post some strong data over the last few weeks which has led many of them, including the ECB, BOE and the BOC to be hawkish in their economic outlook and seriously look to hike rates in the near future. This has helped the respective currencies to become stronger on their own and hence the effect of the stronger dollar and stronger data is somewhat diminished as far as the other currencies are concerned and thats why we are seeing choppy action in the markets nowadays and this is likely to last in the short term with a bias on dollar strength.

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