Dollar Weakness After Shocking Non-Farm Numbers


Dollar Weakness After Shocking Non-Farm Numbers

MAY 07, 2021

The U.S. Dollar is losing ground this morning based on the awful labor creation figures from the Employment Situation. 


While it is clear more people are looking for work with the Unemployment Rate rising from 5.8% to 6.1%, it is also concerning that only 266K jobs were added in April compared to the 1.0MM expected. At the moment of writing, the buck started depreciating rapidly, with majors up over half a percent on average against it.

This helps solidify to investors and traders that the U.S. is not quite out of the pandemic economic woes yet, especially when it comes to the goal of reaching full employment. Furthermore, regardless of comments from Yellen or Fed officials that mention the future need for a tighter policy if the economy heats up, it is clear the financial environment should be left alone and that far more progress is needed before monetary policy intervention.

We shall see if any other headlines impact this week’s closing, which looks to ultimately establish a dollar-weakening trend. The MSCI Emerging Market Currency Index is currently trading at its highest point since mid-February.

What to Watch Today…

  • No major events scheduled for today

View Economic Calendar


The Euro has been going up ever since the release of Non-Farm Payrolls this morning but had a little bit of momentum already as some European Central Bank officials showed confidence in the economic growth to come from the COVID bounce. Martin Kazaks, member of the Governing Council and head of Latvia’s central bank, said the ECB could reduce its Pandemic Emergency Purchasing Program as soon as next month if there is no deterioration and expansion goes on. We shall see how much more Euro will be boosted after German Factory Orders also grew in March by twice the expectation.


The Mexican Peso has been strengthening, already up by 2.5% for the month following more risk-appetite coming into May. Indeed, the Peso’s rise is a sign of the commodity-based world starting to get much better especially since the inoculation efforts in North America have produced good results as re-opening in most areas has been started.

Although there are still idiosyncrasies that can affect MXN long-term particularly when it comes to domestic political stability, neighbors improving their situation has aided MXN along with global trade expanding.