Currency Traders Flock to Volatility of U.S. Non-farm Payroll Report

This morning, the world’s currencies markets, particularly the major currencies including the U.S. dollar, euro and the Japanese yen, experienced a bit of volatility when the March non-farm payroll report was announced in Washington D.C.

The report, which is released on the first Friday of each month (reporting the previous month’s numbers), showed that U.S. employers added 211,000 jobs in March while the unemployment rate dropped to 4.7 percent, a 4 1/2 year low.

The significance of these numbers raises concerns about potential inflation pressures among currency traders, while others look forward to the immediate and short-term volatility that the report puts on foreign exchange rates.

“This is one of the most exciting times of the month because currency prices tend to react quickly to job reports because they provide us with an underlying strength or weakness of the U.S. economy,” said Kurt Hoeksema, manager of dealing, Global Forex Trading.

Hiring last month was stronger than predicted, since only 190,000 jobs were forecast by the majority of analysts, who also had expected the unemployment rate to be the same as last month’s report, 4.8 percent.

Prior to the NFP report, overnight the dollar posted small gains against the euro after yesterdays 100 pip gains, since the move to 1.22 dollar has continued those gains and current EUR/USD level are around 1.2150. During the same period, the dollar bounced between 117.40 and 117.96 JPY, remaining under 118.00 levels.

“Short-term currency traders love these reports because of the increased unpredictability of the currencies. While this can be a risky time to be in the markets, it can also be rewarding for traders,” said Kurt Hoeksema, Global Forex Trading.

Founded in 1997, Global Forex Trading Global Forex Trading, Division Global Futures & Forex. Ltd. (GFT) is a world-leading provider of real-time currency dealing, pricing and comprehensive services for retail and institutional foreign exchange traders. Serving a global customer-base in more than 100 countries through its DealBook® FX 2 trading software and 24-hour dealing operation, GFT’s world headquarters is based in Ada, Mich., with branch sales offices located in Chicago, New York and Tokyo. An office is planned for Sydney Australia in mid 2005. For each successive year between 2001 and 2005, GFT’s year–over–year volume increased an average of 85 percent.

Global Futures & Fore. Ltd. (GFF or GFT) is a registered futures commission merchant (FCM) with the U.S. Commodity Futures Trading Commission (CFTC), a registered broker dealer (BD) with the U.S. Securities and Exchange Commission (SEC), a member of the self-regulatory organization Philadelphia Stock Exchange, Inc. (PHLX) and holds an Australia Financial Services License (AFSL) and is registered with the Australian Securities and Investment Commission (ASIC). Based on these registrations and memberships, GFT is required to adhere to strict capital requirements and follow established rules and guidelines for high professional and ethical business conduct. More information about GFT can be found at www.gftforex.com.


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