The NFP was mixed and caused choppy yet range-bound trading on EUR/USD. Where next for the dollar?
Here is their view, courtesy of eFXnews:
It’s been a happy new year for the US economy so far, with animal spirits perking up and hiring looking robust. The pace of non-farm payrolls gains accelerated to 227k in January, from 157k in the prior month. While the unemployment rate edged up a tick, it was due to a 0.2-ppt increase in participation.
The only real sore spot was the monthly gain of 0.1% in average hourly wages. Although the annual rate of wage inflation was likely to decelerate a couple of ticks, the fall from the revised 2.8% to 2.5% will be seen as a counterbalance to the stronger headline payroll number.
With the ADP survey already signaling the pickup in employment earlier in the week, the market is trading off of the wage number, seeing gains in fixed income and losses for the US dollar.
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