In the United States, the increase and decrease in the number of non-farm workers and the unemployment rate are important data affecting short-term fluctuations in recent years.
The numbers are released by the Labor Department on the first Friday of each month.
Non-farm data provide macro and micro level analysis of the US domestic economy (see Why Non-farm data matters).
The impact of non-farm data is very big. In summary, the non-farm data is good, and the non-farm data is bad.
From the macro level, the change in the number of non-agricultural population in the United States reflects the rise and fall of the national economy.
The increase of the position, can see the domestic company enterprise profit is good, the business increase, thus is the need to increase the position to meet the company business.
If an individual unit of the national economy (a company) continues to add jobs, it means that the national economy is on the rise, which in turn supports the growth of the country.
So, non-farm data can greatly affect the value of the dollar.
This is where nonfarm data can have an impact on foreign currencies: A buoyant jobs report can drive a rise, making the dollar more attractive to foreign investors.
They can earn interest on their holdings of American Treasury bonds;
On the other hand, a bad jobs report could weaken demand for the U.S. currency because it spells trouble for U.S. stocks and puts downward pressure on interest rates.
Both will make the dollar less attractive to foreigners.
In terms of the impact of non-farm data on foreign exchange, according to the macroeconomic interpretation, if the US non-farm data is good, it will support the rise of the dollar, while the non-farm data is bad, it will depreciate the dollar.
In addition, from the micro level, the United States is a consumption-led country, with 2/3 of the domestic market coming from the consumption sector.
The fundamental question is whether consumption is robust.
Taking the consumption of ordinary people as the main body, it is necessary to consider whether American citizens have the ability to consume, and whether there are jobs and salary levels is a crucial issue.
Therefore, from the micro level, the non-farm farm data will be used as an important data to measure the level of US consumption. If the non-farm farm data is good, it indicates that people’s consumption has a better foundation, which is good for the US economy and thus supports the rise of the US dollar.
Otherwise, it is bad for the dollar.
