I think many watching the market must be in complete shock and rubbing their eyes when reading the headline that the United States added an unbelievably weak 38,000 jobs to its economy during the month of May. This headline reading is nothing else but shockingly unexpected, and represents the weakest NFP headline reading for almost six years. The USD is understandably encountering heavy selling pressure following this disastrous jobs number, while the longer-term prospects for the Dollar will be correlated to how the US Federal Reserve look at this NFP report.
Speaking of which, it is worth considering that the Federal Reserve are now supposedly “data dependent” meaning the US central bank are no longer just focusing on job reports and will be focusing on the wider aspects of US economic data as a whole. The wider aspects of the US economy have been performing stronger than expected recently, which is exactly why US interest rate expectations for the summer have been revived over the past month. This NFP report won’t completely close the door on US interest rate talk yet, but it does add another sudden turn on this roundabout regarding how the US economy is really performing.
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