Fundamental Beans

Non-Farm Payrolls


Jul.20.2013

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Nonfarm payroll data, also referred to as nonfarm employment change, shows the total number of paidU.S.workers in every business, excluding employees of places like farms, private households, and general government. These data are also analyzed closely because of their importance in identifying the rate of economic growth and inflation. If the nonfarm payroll is expanding, it is a good indication that the economy is growing, and vice versa.

Higher Figure of Non-Farm Payrolls = Higher Currency Rate

So how can you use the nonfarm payroll data in trading forex? You first listen to the gossips! Before the actual data are released, a lot of geeky analysts and economists sit together and announce payroll estimates. Then you wait for the data to be announced at around 1:30 in the afternoon (GMT) on the first Friday of the month. If the actual data come in lower than economists’ estimates, that usually signals that the U.S. dollar is weakening and that it is a good time to short the dollar (sell it).

If Actual Non-Farm Payroll Number is larger than Forecast = Good for Currency

 

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