USD/NOK DIVES ON WEAK NFP FIGURES FROM APRIL

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  • US NFP increased by 175K in April, below expectations of 243K, following March’s revised increase of 315K.
  • Unemployment rose slightly to 3.9% while wage inflation decelerated.
  • The odds of a cut in September by the Fed rose significantly.

The USD/NOK pair is trading at 10.861, exhibiting a decline of 1.19% on Friday’s session. The USD faced downward pressure as markets are now betting on higher chances of a rate cut by the Federal Reserve (Fed) in September, following the report of weak Nonfarm Payrolls.

April's NFP report from the US showed a gain of 175K jobs, which was significantly below the market expectation of 243K and a decrease from March's revised figure of 315 K. This slowdown in job growth, combined with the slight rise in the unemployment rate from 3.8% to 3.9%, points towards a cooling labor market. Moreover, the wage inflation rate also dipped from 4.1% to 3.9% annually, suggesting softer wage pressures, which can influence the Federal Reserve's approach to monetary policy. The report's overall outcome, reflecting a deceleration in several key employment metrics, highlights a potentially weakening economic momentum.

This supports a more cautious monetary policy approach, aligning with the Federal Reserve's recent moves towards policy normalization and possibly setting the stage for a first cut in September which according to the CME FedWatch tool, increased above 50%


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