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Probable USD reaction to different US NFP outcomes – Scotiabank

Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, shares the probable reaction in the USD under different scenarios of US NFP outcomes.

Key Quotes

“The USD and interest rate expectations are always sensitive to the nonfarm payrolls print, which will hold again today, particularly because of recent market volatility combined with building anxiety over the strength of the U.S. recovery.”

“An above expected print (+250k): is likely to see the USD rally be-tween 50 and 100 points against most currencies;”

“A slight miss (210 to 230k): is likely to drive a slight USD drop—30 points;”

“A significant miss (below 200k): could see further USD long covering and drive a more material downside drop.”

“Developments on the wage front will also prove important, with a in-crease in wages supporting the current Fed stance.”

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