US jobs boost cannot stop FOREX-Dollar Slip
The US Labor Department today announced that nonfarm payroll jobs increased by 192.000 last month. However, in spite of this seemingly positive news, the dollar index slipped back 0.07%.
The index is made up of the six major currencies against which the dollar is traded.
The fall can perhaps be partially attributed to the fact that although the numbers were positive, investors were hoping for even stronger job figures; the buzz in advance of the announcement was that 200,000 jobs would have been added in the last month.
Notwithstanding today’s fall, the index has still shown an overall rise over the course of this past week, in keeping with the upward trend for the dollar since the middle of March.
Whilst the figures weren’t necessarily everything that the markets were hoping for, they will probably be encouraging for the Fed, and give them the confidence to press on with the reduction of their monetary stimulus program (also know as ‘tapering’).
What does all this mean for the online forex trading community? Well, traders should bear in mind from these figures that whilst the overall outlook for the economy is getting healthier, they can still expect some bumps in the road like today if figures do not meet up to expectations.
Now attention will start to turn towards the Fed’s release on Wednesday of the minutes of their most recent policy-making panel meeting. Most investors will be anticipating that the minutes will reflect the current air of confidence emanating from the Fed, and if so, it is reasonable to expect a continuation of the dollar’s recent upward trajectory.
