NFP (Non-Farm Payrolls) is an essential pointer of the current economic state. It includes the data regarding the number of jobs added, government employees, excluding farm employees, private household employees, and employees of non-profit organizations.
This release causes considerable changes in the forex market. You will learn about how it affects you and the right strategies to implement regarding the same.
How Does NFP Affect Forex?
NFP (Non-Farm Payrolls) is data released by the Bureau of Labor Statistics every year.
For the Federal Reserve Bank, employment is a huge factor to consider. For example, employment is a crucial metric to consider.
When employment is high and in a good state, policymakers create an expansionary monetary policy with low-interest rates.
If it is higher than usual, it is anticipated that the economy is running slow, and policymakers will try to increase it. Such a stimulatory policy comes with low-interest rates and decreases the demand for the Dollar.
Currency Pairs Most Affected By NFP
US Dollar (EUR/USD, AUD/USD, USD/JPY, USD/CHF, GBP/USD, and others) are most affected by the NFP release. Traders, you must note that there are other pairs as well that may be affected.
Tips For Trading While Using NFP Data Releases
- NFP data release comes with enhanced volatility.
- NFP is released on the first Friday of every month.
- Currency pairs without US Dollars can also be volatile.
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