NFP release was 151k compared to 190k expectation which should have been negative for the USD however the report also indicated that wages are rising and unemployment dropped to 4.9% from 5.0%. These last two metrics give enough space for the FED to justify the path to rate hikes which is why we saw the initial post NFP drop of the USD quickly reverse. EURUSD touched 1.1253 before collapsing to 1.1110 and this is the same picture across the board with all currencies. GBPUSD spiked to 1.4507 but dropped to 1.4450.
The catalyst for the USD selloff last week was weaker than expected growth data along with negative comments about growth from FED members, which indicated no intentions to raise rates further in 2016. The USD which enjoyed solid growth for 18 months was pricing in more rate rises than other currencies, something which has led to its 2015 appreciation. Now however, traders are repricing its value on every cue that the FED will not raise rates with the pace that was expected.
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