They are more reliable than the weekly jobs numbers for a variety of technical reasons that aren’t important to us here. Investors, for instance, who were thinking of buying US assets will feel more comfortable doing so. The NFP will usually show an increase in jobs. It is estimated that the economy needs to create about 125,000 new jobs impact of nfp in forex month in order to keep pace with population growth and immigration.
Because the NFP numbers are watched so closely, they take on a disproportionate influence. This is an important concept to keep in mind. If no one was watching, slight departures in the report from what was predicted would have relatively little effect on the economy, and thus on the forex markets. However, the numbers are read by forex traders like a diviner reads tea leaves to predict the future.
So, if the numbers come in higher than predicted, everyone knows that people are going to be scrambling to buy dollars. In the days leading up to the release of the report, the markets will have priced in something close to that expected change. 300,000 is seen as truly strong growth. Because the US economy is so important to global economic health, big changes in the NFP are often looked upon as a harbinger for the rest of the world’s economy. If the numbers are really bad, for instance, investors from all over the world may retreat to gold or other commodities that provide safe havens in times of turmoil. Would you like to be contacted to receive more information about opening a trading account? Choose the brokers you would like more information on.
We recommend starting with at least 2. What amount are you expecting to invest? OFXT is here to help you in your path to becoming a forex trader or broker. Our goal is to help you learn, practice, and master the art of currency trading. JPY, or other major currencies, and how the economies of each country impact one another. There is a high amount of risk involved in FX trading, for more information, please see our risk disclosure policy.