Forex News Today (5th January 2024): NFP and Market Summary!

WHAT IS NFP?
An important economic metric for the US is the nonfarm payroll (NFP) report, which shows the total number of paid workers in the country excluding those who work for nonprofits, farms, the federal government, and private residences.


In the foreign currency (FX) market, the nonfarm payroll report regularly triggers one of the biggest price swings of any news release. Because of this, a lot of experts, traders, funds, investors, and speculators are interested in knowing how the NFP number would affect forex.


The total monthly growth or decrease of paid U.S. workers across most businesses is provided by the NFP report, which is normally released on the first Friday of each month.

While falling numbers point to a more pressing economic issue, rising numbers might indicate economic expansion but might also give investors cause for anxiety regarding inflation.


NFP PREDICTION

The US labour market report for December 2023 is anticipated to reveal that the economy added 170,000 jobs, which is a decrease from the 199,000 jobs added in November. There is a little increase in the unemployment rate to 3.8%. Average Hourly Earnings, a key indicator of wage inflation, is predicted to slightly decline to 3.9% in the year ending in December from a 4% gain in November.


GOLD TECHNICAL ANALYSIS

In the European session, the price of gold stays down as investors become nervous in anticipation of the US labour market statistics. The precious metal’s downside appears limited for the time being as the 20-day Exponential Moving Average (EMA) at $2,040 will keep acting as a buffer, while the upside appears limited due to the declining demand for non-yielding assets.


MARKET SUMMARY

EUR/USD is again on the decline following a less assured retreat to approximately 1.0950 during the early European session. Selling pressure is applied to the major currency pair as the market has become more pessimistic ahead of the US labour market report.


S&P 500 futures were quiet throughout the Asian session, indicating that traders are being cautious in front of important economic data.


The Federal Reserve’s (Fed) March interest rate decrease outlook has soured, and the US Dollar Index (DXY) has recovered to about 102.60. Market players are reevaluating their expectations for rate reductions in light of the US economy’s bright future.

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