Economic Report Help in this one!

[shambhu]

Ok. friday april o4.

Today the employment sector lost 80000 jobs, how is that good for the U.S. currency? Gbp/usd drop about 80 pips. i have hard time understanding how is that possible. Anyone, please.

[rhodytrader]

It isn't a positive for the US economy, but that doesn't necessarily have anything to do with the way the market moves.

[shambhu]

Thanks,

I call that market manipulation. Could you?

[bana17a]

I was wondering that too. Normally USD does react accordingly to major econ news but for this morning. the dollar gained on all pound, euro, & the franc. Please help to clear this up. if the news doesn't necessarily have anything to do with how market moves then why market it moved so violently when the news came out. Please bear with me, i'm a newbie so i can't see things from all angles just yet. Thanks

[rhodytrader]

Originally Posted by shambhu

I call that market manipulation. Could you?

Are you trying to suggest that a multi-trillion dollar daily volume market was somehow moved intentionally by someone during its period of highest activity? If so, who exactly do you think has enough capital to do it?

It's not market manipulation.

[rhodytrader]

Originally Posted by bana17a

I was wondering that too. Normally USD does react accordingly to major econ news but for this morning. the dollar gained on all pound, euro, & the franc. Please help to clear this up. if the news doesn't necessarily have anything to do with how market moves then why market it moved so violently when the news came out. Please bear with me, i'm a newbie so i can't see things from all angles just yet. Thanks

There is only one reason why prices move - because the balance of sellers and buyers shifts in the favor of one or the other, creating the need for price to find a new level at which is comes into balance once more. If the numbers didn't generate more USD selling interest, or decrease buying interest, then the USD wasn't going to fall.

Now think about why that might be. Could it be because the sellers had already sold?

The thing that new traders fail to understand is that the market is not moving on present conditions for the most part. You've no doubt heard that the stock market discounts future events. That means the market is looking ahead to what is to come and pricing based on that. The forex market does the same, though perhaps to a lesser degree since there is a large amount of trade and capital flows going on in present terms that has nothing to do with speculation.

That's why the same news events can have complete different market responses based on what the market thinks of the future. If it doesn't change the market's perceptions, prices aren't going to move - at least in a sustained fashion.

[bana17a]

rhodytrader,

Thanks for input. that sure helped clearing some of my questions.

[pip-pip]

[quote=That's why the same news events can have complete different market responses based on what the market thinks of the future. If it doesn't change the market's perceptions, prices aren't going to move - at least in a sustained fashion.[/QUOTE]

It is obvious that the US unemployment report had a great impact on how people feel about the future price of the US dollar. but i still don't understand how 8000 of jobloss would improve the value of dollar in future. I had a hard time understand what motivated buyers outthere.

[rhodytrader]

Originally Posted by pip-pip

It is obvious that the US unemployment report had a great impact on how people feel about the future price of the US dollar. but i still don't understand how 8000 of jobloss would improve the value of dollar in future. I had a hard time understand what motivated buyers outthere.

What if it was a bunch of shorts closing out their positions? That could create the positive USD price move. It wouldn't imply any interest in actually owning USD, though.

[pip-pip]

Originally Posted by rhodytrader

What if it was a bunch of shorts closing out their positions? That could create the positive USD price move. It wouldn't imply any interest in actually owning USD, though.

then why those shorts would close out when the report indicated negative impacts? sorry for repeating the question, but i am really