Updates to the U.S. Non-Farm Payrolls (NFP) report may boost the appeal of the greenback as the economy is anticipated to add 193K jobs in April.

A further improvement in labor market dynamics may heighten the appeal of the U.S. dollar as it puts pressure on the Federal Open Market Committee (FOMC) to act at the next quarterly meeting in June, and Chairman Jerome Powell and Co. may show a greater willingness to deliver four rate-hikes in 2018 as the U.S. economy approaches full-employment.

However, another 2.7% print for Average Hourly Earnings may produce a mixed reaction as it limits the threat for above-target inflation, and FOMC officials may continue to project a neutral Fed Funds rate of 2.75% to 3.00% as ‘inflation on a 12-month basis is expected to run near the Committee’s symmetric 2 percent objective over the medium term.

IMPACT THAT THE NFP REPORT HAS HAD ON EUR/USD DURING THE PREVIOUS RELEASE

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

MAR

2018

04/06/2018 12:30:00 GMT

185K

103K

+47

+49

March 2018 U.S. Non-Farm Payrolls (NFP)

EUR/USD 5-Minute Chart

The U.S. economy added 103K jobs in March following a 326K expansion the month prior, while the jobless rate held steady at an annualized 4.1% during the same period amid forecasts for a 4.0% print. A deeper look at the report showed the Labor Force Participation Rate narrowing to 62.9% from 63.0%, while Average Hourly Earnings bounced back during the same period, with the index increasing to 2.7% per annum from 2.6% in February.

The lackluster developments dragged on the greenback, with EUR/USD rising above the 1.2250 region to end the day at 1.2279.

EUR/USD DAILY CHART