Daniel John J802 Roberts

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What is the role of employment data in forex trading?

Employment figures, such as U.S. Non-Farm Payrolls (NFP), are among the most market-moving releases. Strong job growth strengthens currencies by suggesting economic expansion and potential rate hikes. Weak data triggers depreciation as central banks may ease policy. Institutions use algos to react instantly, causing volatility within seconds of release. Retail traders can trade the aftershock, once direction stabilizes. Benefits: employment is a leading indicator of growth and inflation. Risks: volatility is extreme, with whipsaws common. For example, an NFP beat may strengthen USD, but revisions or wage data could reverse sentiment. Employment reports are high-impact catalysts requiring caution and discipline.