August 5, 2022

Shocking News for USD

Michael J. Donoghue
Shocking News for USD

At 8:30 am Eastern Time today, the Bureau of Labor Statistics reported staggering new US labor market data, revealing a far hotter economy than traders and investors expected. They reported on three different economic indicators, each of which signal roaring US inflation and the likelihood of an even stronger US Dollar in the foreign exchange market. Let’s analyze each of these as we discuss the shocking news for USD.  

1) Average Hourly Earnings (Month-over-Month)

Average hourly earnings, i.e., the cost of businesses paying their employees for labor, were expected to rise by 0.3% month-over-month in the US. Instead, they rose by 0.5%, nearly double that expected. More money in the hands of workers creates more opportunities for consumer spending, which indirectly causes higher prices for goods and services as well, contributing to inflation, which is bullish for USD.

2) Non-Farm Employment Change

Non-farm employment change, or non-farm payrolls (NFP), is the net change in hired people across all industries besides farming. Reported monthly, 250,000 net new hires were forecast to be added to the US economy; instead, the real number was 528,000, more than double that expected. Over half a million new workers will mean far more consumer spending, and also confirms that companies currently have enough revenue to afford to hire them. This number is also significantly greater than last month’s 398,000 jobs added, indicating rampant overheating unthwarted by the Fed, which is extremely bullish for USD.

3) New Unemployment Rate

The new unemployment rate in the US was anticipated to be unchanged from last month’s 3.6%. Rather, the unemployment rate surprisingly declined, settling at 3.5%, a pre-pandemic level. This is shocking data amid a technical recession and rapid, substantial interest rate hikes, and signals that recent high inflation rates are nowhere near dealt with. This labor market is holistically hotter than expected and will likely translate into more buying pressure for USD into the near future, benefitting USD bulls.

Best Pairs to Trade

For those who are interested in exploring which currency pairs present the most promising trade opportunities, consider investing in the EdgeFinder, a helpful A1 Trading tool for supplemental analysis. Fellow analyst Frank Cabibi also wrote an illuminating article on several optimal major pair trade setups for USD bulls that you can read here.

A1 Edgefinder

Watchlist
Save time looking for setups with the EdgeFinder's watchlist! In a glance, see the EdgeFinder's current top buys and top sells.

10% off code: 'READER'

Access Now

Free

Trading Plan Template
Struggling to build a successful trading plan? Download our template to get started today!
Download
Smart Money Likes USD and Gold

As of 9:10 am EST, the 10-Year bond rate is up ~3.50% while the dollar index remains flat. Some big news coming up in the next 24 hours for the USD, EUR and AUD. US consumer confidence is expected to fall from the last reading. We received a strange signal from the EdgeFinder that could […]

Read More
Why Gold Is Going Over $2000

This week, we have seen a lot of market swings in sentiment along with uncertainty around economic stability. Because of this mixed mindset, investors have been shifting their interest towards gold. This article will cover why gold could continue to move higher. Medium to high impact news is coming up for all currencies such as […]

Read More
Major Moves Ahead For USD

There are some major news ahead for the EUR, CAD, AUD and USD pairs this week. Wednesday will be another Fed rate decision forecasted to be another 25 bp. Here are some events set to come out tomorrow: EdgeFinder Analysis UC is still the EdgeFinder's favorite buy score along with USDZAR at +7. Retail is […]

Read More
DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram