Poor NFP Shapes Forex Landscape

The US Change in Non-Farm Payrolls has just been announced, posting a surprising drop of 85k. In addition, these figures were made worse because they also comprised losses of many good quality jobs, including 21k government employees. In response, the EURUSD has surged already by over 100 pips to its present 1.4410 (see hourly chart).

Earlier this morning, the Euro-zone also posted an unemployment rise to 10%. This reading is the highest recorded since 1998.

During the night, the new Japanese Finance Minister watered down his earlier remarks by saying that the markets should decide currency levels. However, there is still a strong opinion that the Japanese government will intervene should a strong Yen surge materialize. Following the NFP result, the USDYEN collapsed to 92.45 from 93.45. Looks like they had better get to it.

A few hours ago, the UK announced that its Producer Prices rose by 0.5% in December versus expectations of 0.2%. In response, the GBPUSD had dropped to lows of 1.5980 before rebounding sharply to 1.6100 following the NFP release.