The non-farm payroll (NFP) report is one of the most important economic indicators in the forex market. It is a monthly report released by the US Bureau of Labor Statistics, which shows the changes in the number of employed people in the non-farm sector of the US economy. This report is closely watched by traders and investors as it provides valuable insights into the state of the US economy and can impact the value of the US dollar and other currencies. In this article, we will explore which forex pairs move the most on non-farm payroll.
Before we dive into the forex pairs that are affected by NFP, it is important to understand how the report impacts the market. When the NFP report is released, it can cause significant volatility in the forex market as traders and investors adjust their positions based on the report’s findings. If the report shows that the US economy is performing well and adding more jobs than expected, it is generally seen as positive for the US dollar. Conversely, if the report shows weaker-than-expected job growth, it can be negative for the US dollar.
Now, let’s take a look at the forex pairs that are most impacted by the NFP report:
1. USD/JPY
The USD/JPY pair is one of the most popular currency pairs in the forex market and is heavily influenced by the NFP report. This is because the Japanese yen is often seen as a safe-haven currency, and when the NFP report is released, traders tend to flock to the yen for safety. If the report shows positive job growth, it can lead to a surge in the value of the US dollar against the yen. Conversely, if the report is weaker than expected, it can trigger a sell-off in the USD/JPY pair.
2. EUR/USD
The EUR/USD pair is also heavily influenced by the NFP report as the US dollar is one of the currencies in the pair. If the NFP report shows strong job growth, it can lead to a strengthening of the US dollar against the euro. Conversely, weaker-than-expected job growth can lead to a weakening of the US dollar against the euro. It is important to note that the EUR/USD pair is also influenced by other economic indicators, such as the European Central Bank’s monetary policy decisions and geopolitical events.
3. GBP/USD
The GBP/USD pair is another popular currency pair that is impacted by the NFP report. The US dollar and the British pound are both major currencies, and any changes in the US economy can have a significant impact on the GBP/USD pair. If the NFP report shows strong job growth, it can lead to a strengthening of the US dollar against the pound. Conversely, if the report is weaker than expected, it can lead to a weakening of the US dollar against the pound.
4. AUD/USD
The AUD/USD pair is another currency pair that can be influenced by the NFP report. The Australian dollar is often seen as a commodity currency, as Australia is a major exporter of commodities such as iron ore and coal. Therefore, any changes in the US economy can have an impact on commodity prices, which can in turn impact the value of the Australian dollar. If the NFP report shows strong job growth, it can lead to a strengthening of the US dollar against the Australian dollar. Conversely, if the report is weaker than expected, it can lead to a weakening of the US dollar against the Australian dollar.
5. USD/CAD
The USD/CAD pair is heavily influenced by the NFP report as Canada is a major trading partner of the US. Any changes in the US economy can have a significant impact on the Canadian economy, which in turn can impact the value of the Canadian dollar. If the NFP report shows strong job growth, it can lead to a strengthening of the US dollar against the Canadian dollar. Conversely, if the report is weaker than expected, it can lead to a weakening of the US dollar against the Canadian dollar.
In conclusion, the non-farm payroll report is a crucial economic indicator that can impact the forex market significantly. The forex pairs that are most impacted by the report are those that involve the US dollar, as any changes in the US economy can have a ripple effect on other currencies. Traders and investors should keep a close eye on the NFP report and be prepared for potential volatility in the forex market.
