Most people who get involved with automatic forex trading do not realize how significant to the global financial markets the US Non-Farm Payroll happens to be. Many people ask me , "why does the monthly US jobs number make the market jump up and down so much after it is released ?" To give you an answer we must realize at what the US jobs number actually represents. Then we will have our insights as to why it makes the markets move like nothing else .

Each month, on the first Friday, the US Non-Farm payroll report is released . This report is put out by the US Bureau of Labor and Statistics and what it quantitatively measures , is the new job number, excluding farming , created in the prior month by the US economy . It is of such importance because this number is a reflection on the health of the economy in the US, and thus affects the global economy as well. After all , in the world, the US economy happens to be the largest and consumer spending is the main component driving the economy in the US ; actually making up 70%! Thus , in automatic forex trading, since the interest rates in a country is the main factor that affects the currency's strength or weakness, you need to take a look at what actually drives those rates ; or the interest rate policy set by the US Federal Reserve . The main piece of data that is used by the Fed is the jobs report to set short term interest rates and because of this, this report can and usually does , lead to quite a bit of volatility in various markets .


Why does this report have anything to do with the short term interest rates set by the Federal Reserve? A wonderful question! If the jobs report is on the strong side usually it means that people have employment and the utilization of resources is high .

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Most people who get involved with automatic forex trading do not realize how significant to the global financial markets the US Non-Farm Payroll happens to be. Many people ask me , "why does the monthly US jobs number make the market jump up and down so much after it is released ?" To give you an answer we must realize at what the US jobs number actually represents. Then we will have our insights as to why it makes the markets move like nothing else .

Each month, on the first Friday, the US Non-Farm payroll report is released . This report is put out by the US Bureau of Labor and Statistics and what it quantitatively measures , is the new job number, excluding farming , created in the prior month by the US economy . It is of such importance because this number is a reflection on the health of the economy in the US, and thus affects the global economy as well. After all , in the world, the US economy happens to be the largest and consumer spending is the main component driving the economy in the US ; actually making up 70%! Thus , in automatic forex trading, since the interest rates in a country is the main factor that affects the currency's strength or weakness, you need to take a look at what actually drives those rates ; or the interest rate policy set by the US Federal Reserve . The main piece of data that is used by the Fed is the jobs report to set short term interest rates and because of this, this report can and usually does , lead to quite a bit of volatility in various markets .


Why does this report have anything to do with the short term interest rates set by the Federal Reserve? A wonderful question! If the jobs report is on the strong side usually it means that people have employment and the utilization of resources is high .

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What You Should Know About Greece, The Euro, And The EU
Automatic forex trading has been unpredictable recently because of Greece's debt crisis. The fear is that this debt crisis in Greece will spread to other heavily indebted countries in the European Union (EU) such as Portugal, Italy, and Spain. As a result of what has happened , the Euro currency has plunged nearly 11% against the US Dollar . There are a few questions we need to ask as we look at this situation : Is the end of the Euro sell off here and is the recent strength in the US Dollar a result of strong fundamentals in the United States or of weakness in the Euro ? The questions are very important because the answer to the first question will be impacted by the answer to the second one .

I believe that there is a benefit to the US dollar currently only because of the weakness of the Euro . Consumer spending in the US economy has picked up steam only because for some time the rates have been near 0% from the Federal Reserve . What will happen when the Fed is forced to raise rates ? Will the economy in the US be able to deal with this ? More than likely, no. You have to keep in mind that there is more spending right now by consumers because many consumers are simply walking away from other payments, such as mortgage, auto, and credit card payments. This allows consumers to have more income than usual and so they can spend more money on things such as clothing, new electronic items, and meals out . Here we go with the punch-drunk consumer once again . In the last boom inflated by the Federal Reserve it was not sustainable and this time is not different . Inflation or default are the only two options for the US Dollar in the next several years and those two things can only mean disaster for the Greenback .

When doing automatic forex trading making money is naturally the goal . We have no biases. We only want to use our foresight for a profit .

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