NFP: Like a hurricane hitting the whole country

The US lost 701,000 jobs in March, the worst in 11 years but the figures are lagging the fast-moving events. The safe-haven dollar has room to rise, FXStreet’s analyst Yohay Elam reports.

Key quotes

“The Non-Farm Payrolls report showed a loss of 701,000 jobs, seven times worse than expected. The unemployment rate jumped from 3.5% to 4.4%, also worse than expected. It is the worst report since March 2009.”

“April could already show a loss of over 20 million, according to Carl Riccadonna of Blomberg, and his estimate does not sound farfetched given the disastrous jobless claims. 

“While the robust salary figures support the dollar in the immediate aftermath, such an artificial bump was well-known and is not the real upside dollar driver. 

“Eurozone Purchasing Managers’ Indexes hit historic lows, the UK is struggling to cope with the disease, and Japan is nearing a lockdown it has refrained from. All the underlying currencies – including the safe-haven yen – are prone to falls.”

“The ISM Non-Manufacturing Purchasing Managers’ Index, due shortly, will likely show a collapse in services sector activity. It may further sour the mood, potentially push the greenback higher.”