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Guide to Forex Trading Strategy & Education

What Impact Does a Higher Non-farm Payroll Have on the Forex Market?

By Kesavan Balasubramaniam Updated January 06, 2024

Reviewed by Thomas J. Catalano

Fact checked by Pete Rathburn

The monthly non-farm payroll report from the U.S. Department of Labor can have a substantial impact on forex markets when the numbers are released on the first Friday morning of a new month.

Traders are always monitoring indicators to identify trends in economic growth and some of the most-watched economic indicators include inflation, housing starts, gross domestic product, and the monthly payroll report. This contains a variety of data and statistics regarding the employment situation in the United States.

Key Takeaways

The monthly jobs report from the U.S. Department of Labor can have a notable impact on the forex market because traders are always monitoring economic data for signs of strength or weakness.

The numbers are released on the first Friday of the new month and capture employment trends from the month before.

The headline payroll number is considered to be the most important but traders also look at other data in the report such as the unemployment rate, changes in wages, and any revisions to past reports.

The forex market will likely see a notable reaction when the payroll report deviates substantially from economists' expectations.