EUR/USD hits 1.1100 ahead of August Nonfarm Payrolls
Stay informed on the recent EUR/USD spike above 1.1100, early employment data impacts on forex markets, and anticipated changes in the US Nonfarm Payroll and unemployment rates—crucial for currency trading strategies.
Key points
- EUR/USD traded above 1.1100, a weeklong high following softer-than-expected ADP employment change
- JOLTS job openings and ADP employment numbers were the lowest since January 2021
- US expected to have added 160,000 jobs in August, up from 114,000 in July
- Unemployment rate expected to improve to 4.2% from last month's 4.3%
- Last month's employment data caused significant market reactions, indicating potential future rate cuts
Euro pops above 1.1100 against the dollar after more soft jobs data
EUR/USD traded above 1.1100 early this morning following softer-than-expected ADP employment change. This marks a weeklong high for the pair; while it spent a week in August above 1.1100, it had not been that high all year previously. The currency pair's rise illustrates how economic data, like employment reports, can quickly influence forex prices.
EUR/USD price history
Early employment numbers spark worries over coming NFP report
Both JOLTS job openings and ADP employment change came in lower than expected, the lowest since January 2021. This has sparked uncertainty over whether the upcoming Nonfarm Payrolls and unemployment rate will meet expectations. Such anticipation often leads to market fluctuations as traders adjust positions based on possible outcomes. Futures markets are currently pricing in a 61% chance of a 25-basis point cut from the Fed at the September meeting, and a 39% chance of a 50-bps cut. While less favored, the probability of a 50-bps cut is up 5% from last week, pointing to increasing worry that bad employment data will require a more drastic move from the Fed.
What to expect from the August Nonfarm Payroll report?
The US is expected to have added 160,000 jobs in August, up from 114,000 in July, which was the lowest month by far this year. Unemployment is also expected to improve to 4.2% from last month’s 4.3%. Last month's data led to significant market reactions as traders rushed to price in more rate cuts; this upcoming release will be insightful for predicting the severity of future Fed cuts as it will be the last point of reference for the Fed heading into the September meeting.
How to trade EUR/USD
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on EUR/USD
Trading forex requires an account with a forex provider like tastyfx. Many traders also watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on economic events such as inflation releases or interest rate decisions. Economic events can produce more volatility for forex pairs, which can mean greater potential profits and losses as risks can increase at these times.
You can help develop your forex trading strategies using resources like tastyfx’s YouTube channel. Our curated playlists can help you stay up to date on current markets and understanding key terms. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.
Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.