American unemployment rate is now at double digits – 10.2%. Obama’s warning of a rate above 10% comes true. This worse-than-expected release, together with Non-Farm Payrolls triggers fear of a slow recovery for a very extended period – “Safe haven” dollar and yen make gains in a choppy market.
The Non-Farm Payrolls disappointed only marginally, and fell by 190,000 jobs, almost at the early expectations of 173,000. The unemployment rate made the big disappointment. by rising from 9,8 to 10.2%. This big jump was significantly worse than the early expectations for a small rise to 9.9%.
The American job market is lagging behind other indicators. While third quarter GDP rose very nicely by 3.5% and exceeded expectations, the job market, as seen in today’s figures, as well as in the weekly unemployment claims, is far behind.
With yet another month of job losses, the growth figures fade away. Sustainable growth is impossible without an improvement in jobs.
Forex Trading after the NFP
The risk factor still dominates the markets – another bad US figure means another strength in the US dollar. The other currency that enjoys this is the Japanese Yen, which makes gains against the dollar. This makes the Yen crosses fall sharply.
The dollar is making gains against most currencies, with EUR/USD, GBP/USD falling. USD/CHF and USD/CAD are rising. The Canadian dollar also suffers from weak employment figures as well, making the road north open for USD/CAD.
Update: The choppy market has its mysterious ways, and the trend is now reversed, with the dollar weakening across the board. A “Friday effect” sure is possible later on.
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