Nonfarm payroll was good but totally failed to support USD. Why?

Nonfarm payroll was good but totally failed to support USD. Why?

When US Job reports first released, the whole financial market was impressed by the data and reacted immediately, pushing US dollar sharply higher agains all of the major currencies as well as gold. The jobs data was really good and blew out everyone’s expectations, in particular:

[icon type=”icon-ok” color=”black”] Nonfarm payrolls of April rose 288k, up from 203k in March while expectation was 210k

[icon type=”icon-ok” color=”black”] Unemployment rate fell to 6.3% while expectation was 6.6% and this was the lowest level since September 2008

Unfortunately, just 3 hours after the jobs report released, the US dollar not only gave up all of its gains but also traded lower agains all of the major currencies as compare with before data released, while gold reversed its downtrend and moved up quickly to above 1300. There were only some possible reasons we could think about:

[icon type=”icon-ok” color=”black”] Significant improvement in the unemployment rate to 6.3% mainly contributed by the drop in labor force participation (down to 62.8% from 63.2% of last month).

[icon type=”icon-ok” color=”black”] The NFP data is not the solely base for the Fed to change the monetary policy

[icon type=”icon-ok” color=”black”] Increasing Ukraine tensions with more sanctions from US and Europe on Russia will also affect the growth of global economy.

Gold was affected most by the Ukraine tensions, short term trend is up now.

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