EUR/USD Rallies on Soft NFP

EUR/USD rallied today, finding help from the disappointing US nonfarm payrolls. While employment rose more than was expected, other indicators failed to meet expectations. The currency pair rallied even as new US tariffs of Chinese goods kicked in, meaning that the trade war between the United States and China has officially started.

Nonfarm payrolls surprised positively in terms of employment growth, showing an increase by 213k in June, exceeding the median forecast of 195k. Furthermore, the May increase got a positive revision from 223k to 244k. Other parts of the report were disappointing, though, with unemployment rate showing an unexpected increase from 3.8% to 4.0%. Average hourly earnings rose 0.2%, whereas analysts had expected the same 0.3% rate of growth as in May. (Event A on the chart.)

US trade balance deficit fell from $43.1 billion in May down from $46.1 billion in April. The actual value was close to the consensus forecast of a $43.3 billion gap. (Event A on the chart.)

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