Upbeat U.S. Non-Farm Payrolls Report To Tame EUR/USD Advance

– U.S. Non-Farm Payroll (NFP) to Rise Less Than 200K for Fourth Consecutive Month.

– Annualized Average Hourly Earnings to Pick Up for First Time Since February.

Trading the News: U.S. Non-Farm Payrolls (NFP)

The U.S. Non-Farm Payrolls (NFP) report may tame the near-term advance in EUR/USD as both job and wage growth are projected to pick up in June.

Why Is This Event Important:

With the U.S. economy nearing full-employment, signs of higher household earnings may boost the appeal of the greenback as it encourages the Federal Open Market Committee (FOMC) to further normalize monetary policy over the coming months. Chair Janet Yellen and Co. may endorse a more aggressive approach amid the growing discussion to unload the balance sheet, and the central bank may also stay on course to deliver three rate-hikes in 2017 as Fed officials now see the economy growing an annualized 2.2% this year. However, a batch of mixed data prints may produce headwinds for the greenback as it drags on interest-rate expectations.

Impact that the U.S. NFP report has had on EUR/USD during the previous print

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

MAY

2017

06/02/2017 12:30:00 GMT

182K

138K

+53

+67

May 2017 U.S. Non-Farm Payrolls (NFP)

EUR/USD 5-Minute

U.S. Non-Farm Payrolls (NFP) increased 138K in May after expanding a revised 174K the month prior, while the jobless rate unexpected narrowed to an annualized 4.3% from 4.4% as the Labor Force Participation Rate slipped to 62.7% from 62.9% during the same period. In addition, Average Hourly Earnings missed market expectations as the figure held steady at an annualized 2.5% for the second-month, and the ongoing weakness in household earnings may force the Federal Open Market Committee (FOMC) to buy more time as the central bank struggles to achieve the 2% target for inflation. The greenback lost ground following the mixed data prints, with EUR/USD clearing the 1.1250 region to end the day at 1.1280.