The Most Notorious Forex Report


Trading news and releases is a major part of Forex trading thanks to how easy it can be for some to predict a currency’s movements from the changes to the economic outlook for the country.

Among some of the most critical Forex releases, we have Non-Farm payrolls, which have been known to single-handedly end or create trends.

Since being one step ahead of the market is one of the best Forex strategies, we will now delve into NFPs and why they are so important for traders.

What Is The Non-Farm Payrolls Report?

It’s one of the economic indicators released by the US. It represents how many jobs have been added outside of farming, government, private household, and non-profit organisations.

The NFP report is released monthly and is one of the most closely watched economic indicators for estimating the current state of the US economy. It is prepared and published by the Bureau of Labor Statistics.

How Non-Farm Payrolls Affects Forex?

As previously stated, the NFP is one of the favourite indicators for the development of the US on the economic side. Thus, it also sheds light into the real value of the USD and possible movements in the exchange rate.

The Fed greatly values the NFP releases as well, and thus, this data significantly affects the measures and policies taken by the US central bank. When there’s high unemployment - for example - the Fed tends to adopt expansionary policies with the aim of increasing economic output.

Therefore, if the NFP shows high unemployment, policymakers will attempt to boost it to run according to its potential. This translates into lower interest rates, which reduces USD demand in the market.

To simplify things, the Non-Farm Payrolls is one of the best US indicators, for it allows the best insight into the real economic development of the country.

Which Pairs Are More Sensitive To The NFP?

USD pairs are the most affected in the Forex market, reasonably, as Dollar demand and supply for the currency is affected by the release of Non-Farm Payrolls jobs data.

It’s worth noting, however, some currency pairs tend to gain more volatility than others depending on their global financial status. For example, USD/JPY has is seen as one of the “safe havens” for investors, hence when the USD plummets and investors dump risk assets in times of risk aversion, the volatility on the USD/JPY pair rises significantly.

When Is The NFP Released?

It’s released on the first Friday of each month at 8:30 AM ET, and any trader can find it on the website of the Bureau of Labor Statistics.

Similarly, the first weekend of each month sees many analyses coming out as a result of data releases, and it’s a good time to do some planning.

Tips For Trading NFP Releases

  • Breakout strategies are usually sager than pullback strategies for NFPs.
  • Spreads tend to widen amidst releases, so scalpers should abstain from trading unless highly experienced.
  • Leverage should be used with extreme caution due to the high volatility.
  • Currency pairs that don’t include the USD can also be affected at times of the NFP.
  • The weekend after NFP releases can be used to devise a strategy, taking advantage of news releases and expert’s analyses.