Published on 07.10.2022 18:01

Stronger than forecast US non-farm payrolls numbers released during the American session has hammered the Euro as traders concluded there was no end in sight to the aggressive path of interest rate rises being pursued by the Federal Reserve.

According to the US Department of Labor, non-farm payrolls increased by 263,000 in September (consensus: 250,000), alongside a two tenths of a percentage point drop in the rate of unemployment to 3.5% (consensus: 3.7%).

Average hourly earnings meanwhile were up by 5.0% year-on-year (consensus: 5.1%) and the labour force participation rate dipped from 62.4% to 62.3%.

The news caused the European currency to hit its lowest level against the greenback in 4  days touching a low of $0.97.38 while the British pound and Australian dollar also tumbled on the news.

A strong jobs report was always going to give a significant boost to the US dollar as the will ensure the US Federal reserve will continue with their aggressive rate hiking cycle which is going to keep the US currency well bid by way of an attractive yield.

"Those hoping for a Fed pivot have been sorely disappointed with today’s job numbers, which have confirmed that US economy continues to rumble along quite well," noted Chris Beauchamp, chief market analyst at trading platform IG.

"The latest bear market bounce has now begun to wilt as investors wearily return to expectations of at least 125bps of tightening by the end of the year, with more to come in 2023. He added.


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