Nonfarm payrolls miss forecasts, dollar drops
The much-anticipated US jobs report for October was released on Friday with some disappointment. There was a gain of 214,000 in the nonfarm payrolls (NFP) figure last month according to the US Labor Department. This number undershot economists’ forecasts for an increase of 231,0000 jobs.
However, the unemployment rate fell to a fresh six-year low of 5.8 percent, despite predictions for it to remains on hold at 5.9 percent.
The only upside to the nonfarm payrolls figure is that it remains above the 200,000 level. Whole some might argue this is a positive and that the jobs report was overall strong, many market participants opted to take profit on their long dollar positions, resulting in the greenback falling.
The dollar has been rallying for the last few months and has risen to multi-year highs due to the market anticipation of tighter US monetary policy next year.
“The reaction to the data is an indication that the market is running tired of the dollar up-move. The market is quite long of dollars and needs perfection to move higher. This data, if we had seen this three months ago, would have the dollar rallying. This is a solid report,” said Greg Anderson, global head of FX strategy for BMO Capital Markets in New York.
The dollar fell after the NFP data on Friday to 114.23 yen following some volatility which to the pair to a high of 115.58 yen.
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