Many foreign exchange investors (FOREX) trade only during or around the time of publication of the US Non-Agricultural Wage Report (NFP). They are attracted by the volatility of currencies – especially major pairs, including the US dollar – that occur during this time. Investors who rely on this and other financial news events for their business are called news traders. Many others, while perhaps using other trading methods, certainly include NFP in their trading calendars. Let’s find out why so many merchants are interested in this report.
The NFP comes out once a month, usually on the first Friday at 8:30 a.m. New York time. Sometimes it will come out on the second Friday of the month, not the first, but always at the same time of day. The US Department of Labor is responsible for compiling and publishing the report, which is kept secret until the official release time. The report contains data on unemployment in the non-agricultural sectors of the US economy. By the way, other industrialized countries also publish some similarities to this type of report. Simply put, if the figures published in the NFP represent a major revision of previous estimates, the market response is likely to be quite clear.
The reaction of the expected data on NFP by traders worldwide, in terms of buying and selling activity, generally leads to jumps up or down in the price of the US dollar. This usually happens when the report goes public. Sometimes the jump occurs early, ie. within the minute immediately preceding the release at 8:30 a.m. Although less common, it has also been observed that the jump may occur up to 15 or 20 minutes after the publication of the report.
Other regular financial statements may also drive currency prices, but are not as consistently dramatic or dynamic as the NFP in its outcome. In the last few years, the range of price in the price of the US dollar as a result of the NFP has usually been between 50 and 90 pips in one general direction. Re-tracing, ie. moving the price back to the original price often provides additional trading opportunities. Many traders receive returns ranging from 5 to 20 percent from this report alone.
Why does NFP stand out for its ability to drive the market? The NFP is published by the United States government as an official statement of what the US economy is doing. Based on the content of the report, the measurement of a country’s health is considered in terms of its employment. Many scholars and traders view the employment situation in a country as a leading indicator of how things are doing economically in that country. If the employment situation is bleak, so should its overall economy. A weak economy invariably means bad news for the currency of this particular country.
It must be acknowledged and appreciated that the US dollar has always aroused great interest among traders around the world. Known for its liquidity, relative stability and sustained by the world’s largest economy (at least until China ranks first, as expected in 2026), greenbacks are often accepted as payments for goods and services around the world. This is true even when it is not the official currency in a jurisdiction. It is one of the relatively few currencies known as “hard currency” in the global financial sphere. He is always in the spotlight as a global player.
Recently, the US dollar has been weakening against other currencies. Undoubtedly, global developments, including US involvement in Iraq, Pakistan and Afghanistan, have contributed to the vague view shared by some about the value of the dollar. On the other hand, some see this as a good opportunity for American corporations, large and small, to export goods and services to other countries. This could lead to a long-term recovery of the dollar.
Various strategies have been developed to take advantage of the trend of market prices to jump during the NFP announcement. As might be expected, some strategies work better than others. More and more vendors and programmers are developing and selling automated software to retailers who are interested in the rapidly evolving environment surrounding the launch of NFP. The price range of such software can be from several hundred dollars to several thousand dollars. Of course, manual trading with NFP can still be successful, as many traders have proven. Regardless of the method or strategy, many in the trading world will continue to pay attention to the NFP and use its launch as one of the largest regular and recurring trading opportunities in the FOREX market.