EUR/USD Edged Higher After Wage Inflation Misses Expectations

EUR/USD was swinging widely immediately after the release of nonfarm payrolls but decided to go higher after all. Apparently, markets preferred to pay more attention to lower-than-expected wage growth rather than to solid employment growth that was above expectations. With factory orders and the ISM non-manufacturing indicator also trailing forecasts, the currency pair went even higher.
Nonfarm payrolls rose by 227k last week in January. That was a far better reading than the predicted 179k and the December’s 157k. Unemployment rate ticked up unexpectedly from 4.7% to 4.8%. Average hourly earnings rose by approximately 0.01%, trailing the analysts’ forecast of 0.03% and the previous month’s increase of 0.02% (revised lower from the initial 0.04%). (Event A on the chart.)
Final Markit services PMI climbed from 53.9 in December to 55.6 in January while the analysts’ median forecast was the same as the preliminary value of 55.1. (Event B on the chart.)
ISM services PMI edged down to 56.5% in January from 56.6% in December (revised down from 57.2%), below the average forecast number of 57.0%. (Event C on the chart.)
Factory orders increased 1.3% in December, missing market expectations of 1.5% growth. The indicator fell 2.3% in November. (Event C on the chart.)

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