Non-Farm Payroll (NFP) is one of the major factors and Forex News that can stir the smooth flow of Forex trading. It is a general term that represents the number of jobs in USA. It is important to note that you do not include government employees or the employees of non- profit organizations in it. Similarly non-farm payroll does not include the employees of private firms and farms.
Influence of NFP on Forex Trade:
Non-Farm Payroll has the ability to affect the trade of USD. At the same time, it can influence the equities and the value of Gold as well. It can cause a shift in the trading trend. NFP can increase or decrease volatility in the trading. It is a vital economic factor of USA. It reflects the total figures of the recently created jobs. The traders of USD consider the time of the release of Non- Farm Payroll as the most crucial timeframe for trading. At that time, Forex market becomes very sensitive and this state of market results in high volatility. Thus in this way, you can understand the influence of NFP on the volatility of Forex market.
Novice Traders & Non-Farm Payroll:
If you are a novice trader then you must pay attention to Non-Farm Payroll. Thus if you want to survive in Forex trading for a long time then you need to understand the dependence of the trade of USD on NFP. Non-farm Payroll is released on monthly basis. This is a fine indicator of latest state of the economy. Federal Reserve Bank pays great importance to the employment factor. When unemployment is high then it means that economy is not stable. Thus Federal Bank tries to stimulate the economy through a change in the policy. This change in policy reflects in decrease in the interest rate to cap the demand of USD. Currently it is expected that the the release of NFP on 8th March will show 180000 more added jobs. Let’s see what 8th March reveals!