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Article / 05 August 2016 at 13:07 GMT

EURUSD slides below 1.11 after July NFP hits 255,000

Former managing editor, / Saxo Bank
  • Nonfarm payrolls print for July comes in at 255,000
  • Another bumper figure ramps up the pressure on US Federal Reserve
  • Fed still unlikely to make a move in September
  • Dollar immediately jumps against major peers
  • Despite beating consensus, figure unlikely to see major EURUSD move — Larsen


July's NFP print for 255,000 sends the Federal Reserve a massive hint. Photo: iStock

By Martin O'Rourke

EURUSD fell some 70 pips in the immediate aftermath of another mammoth nonfarm payrolls for July at 255,000 to hit 1.1093 from around the 1.1160 area in the runup to the 1230 GMT announcement.

Dan Larsen from the FX Options desk said: "I do not think this move is good enough for a significant EURUSD move".

July's figure follows on from June's huge 287,000 number and dramatically outstrips the consensus expectation for 180,000. The latest figure is also likely to see the poor May figure of 38,000 consigned as something of an outlier in a general trend of positive NFP prints stretching back some three years.

EURUSD fell some 70 pips in the immediate aftermath of the 255,000 announcement


Source: SaxoTraderGO

The dollar also spiked against USDJPY to the 101.60 area before the initial wave gave way to return the pair to the 101.25 zone. USDJPY had been at 101.0 in the runup to the print release.

USDJPY spiked to above 101.50 after the 1230 GMT releaser

Source: SaxoTraderGO

GBPUSD fell to around the 1.3030 after the NFP announcement for July.

The figure is likely to raise speculation once again as to when the US Federal Reserve makes its next move on interest rates.

While that may see the clamour among Fed hawks for a move in September, it is still likely that the increasingly fractious battle for the presidency between Donald Trump and Hilary Clinton coupled with ongoing fallout from the Brexit vote on June 23 will ensure December remains the most likely date for a fresh rate push.

"This number clears a path for a move in December", said Larsen.

The Fed raised rates in December 2015 for the first time since the global Financial crisis.

Elsewhere, unemployment was unchanged at 4.9% and hourly wages were up 2.6%, in line with consensus.


What will the august body do now? Photo: iStock

Martin O'Rourke is managing editor at Saxo Bank

Martin O'Rourke Martin O'Rourke
EURUSD continues to stretch lower towards 1.1050, USDJPY is in the 101.70 zone and GBPUSD has stabilised at the 1.3030 mark exactly one hour after the NFP release.
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