Friday, 3 Sep 2010

Payrolls Figure May Dampen Investor Confidence

According to the latest predictions, employment in the United States most likely fell for a third consecutive month in August, as concerns about the pace of the global economic recovery persist throughout the US. Whether the predictions are accurate will only be known at 12:30 GMT today with the release of the latest US Non-Farm Payrolls figure. Most analysts assume that the payrolls figure fell by roughly 100K last month, which if true, would be a slightly better figure than July's. That being said, any negative number will likely be bad for investor confidence and could have a drastic effect on the currency market.

Over the last few days, riskier currencies have been making slow, but significant gains on the safe-havens. Since the first of the month, EUR/USD has gone up almost 175 pips. EUR/JPY has gone up around 185 pips in the same amount of time. Should the payrolls figure come in as expected, investor confidence is likely to drop, and the safe haven USD and JPY will likely see some upward movement to close out the week. That being said, if the payrolls figure comes in above expectations, currencies like the euro and GBP could see further bullish movement.