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- The Non-Farm Payroll: Results Are In, What Does That Mean For Cryptocurrency?!
The Non-Farm Payroll: Results Are In, What Does That Mean For Cryptocurrency?!
The NFP Reports - Main Takeaways
- Today brings the release of the Non-Farm Payrolls data for the month of May, carrying an expectation of +325k upon the heels of last month’s +428k.
- The report has resulted in a better than expected figure of 390k.
- Unemployment rate at 3.6% didn't drop any lower and no upsize surprise in wages.
- All this proves the Fed is having an impact on inflation.
Today, May’s NFP report has just been released. In April, the Non-Farm Payrolls rose 428,000 surpassing the forecasted figures of 390,000. So with the figures out of the way, what does that mean? What IS the NFP report? It simply tells us the state of the US economy giving us data on the changes to the number of people employed during the previous month.
Now with all that being said, what does this mean for CRYPTO?! There is not a whole lot of information out there covering the NFP report, and there SHOULD BE! Why? Because it's simple, crypto is correlated by a certain degree, to the traditional markets!
First, let's remember this short summary when it comes to figuring out what the NFP results actually mean:
- A better than expected NFP → stronger economy 💪 → stronger dollar 🟢 💲
- A worse NFP than expected → weaker economy ❄️→ weaker dollar 🔴 💲
In today's case, we are in the first category; with a better than expected NFP. So this theoretically will lead to a stronger dollar which we know ultimately can NOT be good for Bitcoin. This is because historically we have seen this correlation between the dollar and Bitcoin; as the dollar strengthens, Bitcoin and other commodities do not perform well! *However, one thing to note here is that although we did have better than expected figures, the change over May wasn't that drastic so we may not see any massive swings this time around!
Of course, as we explained in our earlier article on how does the NFP affect the crypto market (read more here), we do get to see immediate volatility that seasoned forex traders especially take advantage of, however, that volatility does cool down and it is then where we start to see the general after-effects of the NFP in the traditional markets thus leading into crypto. But we can now be more confident in where the direction is going.
On Monday mornings’ daily update at NAGAX, we will have a more concise report as to how all the markets reacted, and its knock-on effect globally including crypto! Keep your eyes out for that one!
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