CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

How to Use the NFP Report

  • Fundamental analysis
  • Guides
1 minute(s)
The report from the American labor market (Non-Farm Payrolls, NFP) is probably the most popular report among traders. This article explains why and shows examples of how the report has affected EURUSD in the past.

The report from the American labor market (Non-Farm Payrolls, NFP) is probably the most popular report among traders. This article explains why and shows examples of how the report has affected EURUSD in the past.

The Federal Reserve, the most important central bank in the world, has two main goals - low and stable inflation, and full employment. When traders want to predict the Fed's future steps, the labor market report is naturally the first point to observe. Employment growth is usually favourable for the US dollar, because it translates into a lower unemployment rate and may create inflationary pressure in the economy. In turn, the Fed reacts to this phenomenon by raising rates, and higher rates are usually favourable for the currency. However, what does high dynamic mean? Published data are always compared to expectations that can be checked in the economic calendar on the xStation platform. Let's look at a few examples.

Example 1 - Weak NFP Report

The NFP report for May 2017 showed an increase in employment by 138,000. Although this was not a low value, the result turned out to be lower than expected - consensus pointed to an increase of 182,000. Therefore, the lower value was treated as a disappointment for investors and led to the weakening of the dollar. As a result, EURUSD increased sharply.

Weak NFP Report

The data presented above refers to the past and cannot constitute an indicator or guarantee of achieving similar results in the future.

Source: xStation

Example 2 - Strong NFP Report

The opposite situation took place after the release of the December 2018 data. The report showed an increase in employment by 370 thousand, while the consensus pointed to 184 thousand. As a result, the dollar gained strongly, while EURUSD fell.

Strong NFP Report

The data presented above refers to the past and cannot constitute an indicator or guarantee of achieving similar results in the future.

Source: xStation

As you can see, the NFP report can have a significant impact on EURUSD.

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.