USD CAD Weekly Forecast: Surging Oil Supports Canadian Dollar

It represents the number of jobs added, excluding farm employees, government employees, private household employees and employees of nonprofit organizations. The probability for a March Fed rate cut currently stands about 65%, according to CME Group’s FedWatch Tool. Nonfarm Payrolls (NFP) in the US rose 187,000 in July, the US Bureau of Labor Statistics reported on Friday. For the labor market, the narrative is straightforward – normality at last. Nonfarm Payrolls failed to provide a straightforward narrative for investors, and not for the first time. Nonfarm Payrolls (NFP) in the US rose by 336,000 in September, the US Bureau of Labor Statistics (BLS) reported on Friday.

  1. Lower interest rates or a dovish Federal Reserve is usually bearish for the US dollar while higher rates tend to be good for the dollar.
  2. This week’s US employment data signaled loosening labor market conditions, which if backed by a weak November Nonfarm Payrolls data on Friday could bolster Fed rate cut bets.
  3. Other details of the report showed that the Unemployment Rate remained unchanged at 3.7% and the annual wage inflation, as measured by the change in the Average Hourly Earnings, climbed to 4.1% from 3.9% in November.
  4. The NFP data is released monthly and is an accurate representation of the current economic state of the USA.

The Bureau of Labor Statistics (BLS) is due to release the highly-anticipated Nonfarm Payrolls (NFP) report from the United States (US) on Friday, which could have major ramifications for US Federal Reserve (Fed) policy outlook. The US Dollar (USD) is poised for a big reaction to the labor market data, as NFP data tends to infuse intense volatility across the FX board. Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.

The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high nfp forecast NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work.

Given the market positioning, however, a USD sell-off on a weak NFP figure could remain short-lived. On a hawkish note, Chicago Fed President Austan Goolsbee and Cleveland Fed President Loretta Mester both argued in late December that the markets have gotten ahead of themselves on likely interest rate cuts. These comments, however, did little to nothing to alter the expectations of a March rate reduction.

The October Core PCE Price Index data also bolstered dovish Fed expectations. The Fed’s preferred inflation gauge rose 3.5% on the year, moderating from a 3.7% reading while holding well above the Fed’s 2.0% target. We could start lowering the policy rate just because inflation is lower,» Waller said on November 28.

Bitcoin USD

As a result, the Dollar Index depreciated in value and volatility increased. Employment is a very important indicator to the Federal Reserve Bank. When unemployment is https://g-markets.net/ high, policy makers tend to have an expansionary monetary policy . The goal of an expansionary monetary policy is to increase economic output and increase employment.

Inflation in Canada came in higher than expected, dashing hopes for early rate cuts by the BoC. Meanwhile, the US economy remained resilient, with robust retail sales and a significant drop in initial jobless claims. We’ll repost that chart again because it’s where we’ll pick things up as we get into our job market data for October and our non-farm payroll forecast for the month. This week’s US employment data signaled loosening labor market conditions, which if backed by a weak November Nonfarm Payrolls data on Friday could bolster Fed rate cut bets. The US labor market report is likely to show that the economy created 180K jobs last month, up from a job addition of 150K reported in October.

Under The Hood, December’s Jobs Report Continues Some Worrisome Trends

The NFP data is released monthly and is an accurate representation of the current economic state of the USA. In addition to unemployment and job rates, there are some other data included in the NFP reports. NFP in forex trading is a very commonly used term that refers to a special period of time in the forex markets. Price almost always responds in a spectacular fashion to the release of the figures, and you can sense the drama in the air. It also helps to place a stop-loss in case the price bar selected wasn’t the actual price pullback low. Forex traders create price fluctuations as they buy and sell currency.

USD/CAD Weekly Forecast: Dollar Thrives on Surprising NFP

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Question 4: Can Everyone Trade Everything During NFP?

So, when this information is released by the department, the markets will often shift drastically, meaning forex traders can then make bank simply by entering the right positions. NFP is the release of changes in employment figures inside the United States of America, which obviously has an effect on the markets related to currency trading. Economic growth leads to potential inflation, followed by an increase in interest rates to compensate for inflationary pressures, making the currency more attractive and competitive than other currencies. This is because the economy tends to do well when most people are working.

So, as you can see, it isn’t just the non-farm payroll figures themselves, but also how they live up to what the numbers were expected to be. From the words of Nasdaq, the release of non-farm payroll figures (NFP) is the most highly anticipated event in the entire US economic calendar. During this time, the markets are of the most volatile as they will be all year. The markets will typically make giant moves upon the release of this data during NFP. If you trade forex long enough, you are going to want to know what NFP is in forex trading.

This is fine, but my personal performance is better with the more advanced strategies discussed later on. That said, the advanced strategies are more subjective and may be harder for some people to implement. Follow our live coverage of the Nonfarm Payrolls report and the market reaction. However, the main driver for the pair towards the end of the week was the rally in oil prices.

Any examples given are provided for illustrative purposes only and no representation is being made that any person will, or is likely to, achieve profits or losses similar to those examples. DailyFX Limited is not responsible for any trading decisions taken by persons not intended to view this material. Since the NFP report is scheduled this coming week, I thought it would be good for us to take a closer look at this fundamental giant. The mission of the DOL is to assure the prosperity of the wage earners, job seekers which includes more than 10 million employers and 125 million workers in the USA.

Nonfarm Payrolls (NFP) in the US rose 187,000 in August, the US Bureau of Labor Statistics (BLS) reported on Friday. The US labor market data is crucial to the US Federal Reserve (Fed) interest rate outlook for 2024 and thus it has a significant impact on the US Dollar (USD) valuation. So, shortly before and after this data is released, you can expect the forex markets to become extremely volatile.

Our ultimate guide on how to trade NFP is continuing with a series of questions to help explain the factors affecting the forex market during NFP. The USD/CAD weekly forecast paints a slightly bearish picture, with the Canadian dollar riding the wave amid surging oil prices. But that’s what led us to last’s week’s post – the soft landing is over. NFP trading can provide benefits to traders trying to profit on highly volatile price movements. However, it is extremely difficult to determine the direction of the price before the move has happened. At starttrading.com we recommend waiting at least 15 mins after a high impacting news event to enter a trade, allowing you to better perspective on how the news will affect the price.

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