Dollar Rallies on Job Gains


It finally happened – the American job market gained 162,000 jobs in March. The highest gain in 3 years sends the dollar higher across the board. Not all currencies affected equally. NFP Analysis.

Non-Farm Payrolls rose by 162K. This is the first time that the Department of Labor reports a rise in jobs in the month that just ended. There was a gain in jobs in November 2009, but this was seen only in a revision that came later – not in the initial report.

Early expectations stood a rise of 180K, or on a media of 200K according to Reuters. So, this seems like a disappointing result. Indeed, the initial response was somewhat hesitant. But two factors helped the dollar rise:

Despite the small miss, this is still the biggest gain in jobs in three years. This is really great news. The unemployment rate remained unchanged at 9.7%, as expected.

The second reason for the dollar’s strength is that the rise in jobs doesn’t solely lean on the government – the 2010 decennial census is only a small portion of gains – the private sector added 123,000 jobs – the highest since May 2007. This shows that the rise is real and strong, and also that the ADP Non-Farm Payrolls announced earlier in the week were totally wrong.

Forex reaction

On thin volume, due to Good Friday, EUR/USD fell below 1.,35, GBP/USD fell below 1.52, and USD/JPY broke the resistance line and made a leap to 94.50. Note that the good Non-Farm Payrolls helped GBP/JPY that touched 144.

But not all currencies are equal: the Aussie reacted in a more mild way. USD/CAD stood out with a fall – the pair dipped below 1.01 – the Canadian dollar showed its strength once again.

This strength of the loonie on the backdrop of the NFP signals that USD/CAD may reach parity next week, on Canadian employment figures.

— This post will be updated as the market continues to move on the NFP —

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free.

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.


  1. Pingback: Forex Links for the Weekend - April 3r | Forex Crunch

  2. Pingback: Forex Weekly Outlook – April 5-9 | Forex Crunch

  3. Pingback: Forex Daily Outlook – April 5th 2010 | Forex Crunch

  4. Pingback: EUR/USD – 3 Reasons Why This Fall Will Be Strong | Forex Crunch

  5. Pingback: Forex Weekly Outlook – April 12-16 2010 | Forex Crunch

  6. Pingback: Non-Farm Payrolls Preview - May 7th | Forex Crunch