Home > All > Forex News – Non-farm payrolls print lower than expected number; USDJPY drops
Posted on May 4, 2012 by Trading Point Investment Research Desk at 1:35 pm GMT
The much awaited U.S. non-farm payrolls report was released today, creating alot of volatility in the currency markets.
The NFP disappointed by printing a much lower than expected number, highlighting the sluggishness of the labour market and the slow economic recovery in the United States.
In April, non-farm payrolls rose by 115,000 despite forecasts for 170,000 jobs to be added to the economy. However, March payrolls were revised up to 154,000 from 120,000.
The unemployment rate fell to 8.1 percent from 8.2 percent where it was expected to remain unchanged.
The initial knee-jerk reaction in the currency markets was for dollar to fall sharply against yen. This is because a weak labour market and sluggish US economy would renew the likelihood of more stimulus and quantitative easing by the Federal Reserve. This is usually negative for the dollar.
USDJPY dropped to 80.15 within a minute of the data from 80.25 where it was just before the news. Some volatility subsequently followed before the pair began falling back down again to 79.92 an hour after the data.
EURJPY see-sawed immediately after the NFP report, initially jumping then falling to 1.3113, then gradually rising back up to 1.3159 an hour after the news.
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