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US unemployment rate drops for all the wrong reasons

North American employment reports came, we saw and they have been trying to conquer the risk trade ever since. It certainly was a mixed bag of data to end ‘this’ of all weeks on. Canada did a U-turn, and provided us with as many job losses (-18.7k) as positives (+18.6k) the market had been expecting. Unlike its southern neighbor, the unemployment rate inched higher (+7.4%). In contrast, the US hit headline expectations (+120K) and gave us some strong positive revisions. The unemployment rate firmly beat everyones expectations (+8.6%), however, the labor force participation rate eased to a 28-year low (+64%) as people dropped out in droves, either because they are retiring or simply too discouraged to continue looking for employment. It was driven by a drop of-315k in the labor force and a big-594k drop in the number of unemployed despite just +120k more people getting work.

Below are some other highlights of the week:



EUROPE Week in FX [1]

ASIA Week in FX [2]



  • Central bank decisions come to us from AUD, NZD, BoE, EUR and CAD
  • CHF delivers its CPI outlook
  • Services and non-manufacturing PMI is released in CAD, GBP and USD
  • CAD gives us building permits and housing starts
  • AUD announces its GDP outlook and employment situation
  • Trade Balance in reported in USD and CAD
  • The week ends with USD’s Prelim UoM Sentiment


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell [7]

Vice-President of Market Analysis at MarketPulse [8]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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