HOW NONFARM PAYROLLS (NFP) IMPACTS THE US DOLLAR & USD PRICE VOLATILITY
- The US Dollar[1] typically exhibits heightened volatility around the monthly release of nonfarm payrolls data and places USD[2] price action at risk of experiencing outsized moves
- Realized volatility in the US Dollar Index and its major currency pairs[3] around NFP[4] reports tends to run above-average as forex traders reassess the US economy and jobs market
- Read more on Trading the NFP Report[5] or check out this insight on the Federal Reserve[6] for details on how nonfarm payrolls data can impact FOMC[7] interest rate decisions
Currency volatility[8], which is characterized by the frequency and magnitude of changes in a currency’s value, tends to rise during times of heightened market uncertainty. The periodical release of US jobs data – like nonfarm payrolls – in addition to several other high-impact economic reports have historically served as primary catalysts for heightened market activity.
Read More – US Dollar, Gold & Dow Jones React to Catastrophic NFP Report[9]
Referred to less formally as NFP or NFPs, monthly nonfarm payrolls data is published on the first Friday of each month at 8:30 AM EST by the Bureau of Labor Statistics (BLS[10]). Due to the 04 July Independence Day holiday, however, the upcoming NFP report for June 2020 will be released Thursday, July 02 at 12:30 GMT. This closely watched jobs report provides market participants with a detailed summary of the employment situation and broader labor market conditions across the United States.
US DOLLAR VOLATILITY TYPICALLY ELEVATED IN RESPONSE TO THE MONTHLY NFP REPORT (CHART 1)
In consideration of the Federal Reserve (Fed) and its
