On Friday 04-03-09 at 8:30 AM ET, the USD Non-Farm Employment Change and USD Unemployment Rate reports will be released for the month of February.
Along with USD Change in Manufacturing Payrolls, USD Average Hourly Earnings (MoM), USD Average Hourly Earnings (YoY), and USD Average Weekly Hours
These should not have any affect on the market
The previous USD Non-Farm Employment Change and USD Unemployment Rate reports came out on Friday 03-06-09 at 8:30 AM ET.
In the past, only the USD Non-Farm Employment Change had an influence on the U.S. economy, but now, under the current conditions, the USD Unemployment Rate is having an influence on the economy as well.
The USD Non-Farm Employment Change report released in March, for the month of February, was set up as follows:
Previous Report: -598K – down from -577K (revised) February report.
Economists Forecast: -647K – not an improvement.
The actual report: -651K – higher than forecast by 4K – but still not good for the USD.
The USD Unemployment Rate report released in March, for the month of February, was set up as follows:
Previous Report: 7.6% – (not revised)
Economists Forecast: 7.9% – not an improvement.
The actual report: 8.1% – not good for the USD
The USD Non-Farm Employment Change report for October, November, December, January, February and March “previous” reports have been “revised” just a few minutes after the actual report release. No revisions for the USD Unemployment Rate.
The “revisions” could have an effect on the currency market – but I have not seen how much yet.
I monitored 4 currency pairs during the March USD Non-Farm Employment Change report and here is what happened:
EUR/USD – moved down about 31 PIPS first minute – wrong direction
then moved up about 124 PIPS in 4 minutes – right direction
moved down about 95 PIPS in 6 minutes – wrong direction
then moved up about 110 PIPS in 45 minutes – right direction
GBP/USD – moved up about 51 PIPS in 3 minutes – right direction
moved down about 45 PIPS in 18 minutes – wrong direction
then moved up about 50 PIPS in 7 minutes – right direction
USD/CAD – moved down about 42 PIPS in 3 minutes – right direction
then moved up about 45 PIPS in 8 minutes - wrong direction
moved down about 60 PIPS in 24 minutes – right direction
USD/JPY - moved up about 55 PIPS in 3 minutes – wrong direction
moved down about 45 PIPS in 5 minutes – right direction
then moved up about 90 PIPS in 31 minutes – wrong direction
The USD Non-Farm Employment Change for this month’s release (a report on March Employment change) has a “forecast” of -662K, a decrease in those people employed from -651K. The USD Unemployment Rate is forecast at 8.5%, up from 8.1%
If the “actual” USD Non-Farm Employment Change report comes out less or more than the “forecast” by a large amount, say 50K or more, this would be a huge surprise for FOREX traders and the market may move considerably in the following minutes of the report.
So, let’s set this up: For USD Non-Farm Employment Change
The March previous= -651K
The economists forecast= -662K
If the “actual” report comes out -712K or more, this will be real bad for the USD, and a big surprise for traders. The EUR/USD currency pair could shoot up.
However, if the “actual” report comes out at -601K or less, this would be good for the USD and again, a big surprise for traders. The EUR/USD currency pair could shoot down.
So, let’s set this up: For USD Unemployment Rate
The March previous= 8.1%
The economists forecast= 8.5%
The USD Unemployment Rate report coming out greater or lesser than expected may affect the currency market, be aware of conflict if the reports do not support one another.
The probabilities set forth above are assuming no unpredictable events are taking place at the same time.
Speeches on the economy by government officials, or a situation somewhere in the world that could have an impact on the U.S. economy – could adversely affect the market.
Sometime after the end of the USD Non-Farm Employment Change and USD Unemployment Rate reports I will post the results. So, check back!
Friday 04-03-09:
Here are the results of USD Non-Farm Employment Change and USD Unemployment Rate reports:
-663K job losses and the Unemployment rate went up to 8.5% – both events are bad for the USD and the US economy.
Here is how it affected the 4 currency pairs I follow:
EUR/USD – moved up about 35 PIPS in 5 minutes – right direction
then moved down about 102 PIPS in 32 minutes – wrong direction
GBP/USD – moved up about 62 PIPS in 5 minutes – right direction
moved down about 79 PIPS in 19 minutes - wrong direction
USD/CAD – moved down about 70PIPS in 5 minutes – right direction
moved up about 95 PIPS in 43 minutes – wrong direction
USD/JPY – moved up about 38 PIPS in 3 minutes – wrong direction
then moved down about 53 PIPS in 11 minutes – right direction
Looks like the USD/CAD currency pair was the best trade today.
