• NFP: A small disappointment could trigger major price movements in the USD – Commerzbank

Market news

6 October 2023

NFP: A small disappointment could trigger major price movements in the USD – Commerzbank

Today, all eyes are once again on the US labor market report. Economists at Commerzbank analyze in which direction the USD will ultimately move.

FX market could react more sensitively to a negative surprise than to a positive one

A lot of optimism about a soft landing for the US economy already seems to be priced into the FX market, so even a small disappointment could trigger major price movements in the USD. 

By contrast, a positive surprise is likely to merely confirm market expectations and thus provide little additional support for the USD – unless, of course, the labor market report turns out exceptionally well.

After the USD rally of the last few weeks, the FX market could react more sensitively to a negative surprise than to a positive one.

See – NFP Preview: Forecasts from seven major banks, losing momentum

 

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