The first surprising news this year came last Friday (10/1). NFP (Non-Farm Payrolls) for December 2013 which was thought will be over 200,000, came out a measly 74,000. This is the worst job created since January 2011. The news shocked the market, and resulted in the fall of USD against all of its counterparts, including the Yen, Aussie, and Gold. It could be said that no one guessed this, because the previous NFP was so good (241,000).

The first surprising news this year came last Friday (10/1). NFP (Non-Farm Payrolls) for December 2013 which was thought will be over 200,000, came out a measly 74,000. This is the worst job created since January 2011. The news shocked the market, and resulted in the fall of USD against all of its counterparts, including the Yen, Aussie, and Gold. It could be said that no one guessed this, because the previous NFP was so good (241,000). What's more, it is quite strange that even though job creation fell, but unemployment rate lowered from 7% to 6.7%.  
usThe Impact of NFP on USD
NFP is the data that represents how many jobs created or lost from all sector except general government workers, household workers, nonprofit organizations, and farm workers. NFP is released by US Bureau of Labor Statistics every month at the first Friday. NFP encompasses around 80% of workforce that produced overall US GDP; this is why it has strong impact in USD.

Most analysts blamed the low NFP on the winter season. Harsh cold wave hit several states and hampered business activities. From the NFP, we could see that construction is the one sector that got the worst; its workforce lost about 16,000 in December. It is also important to note that worker participation fell to 62,8%, lowest since 1978. Canada who suffered the same condition, issued disappointing employment data too.
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However the forecast for next NFP for the time being is 170,000. It means, last friday's NFP is thought of as an anomaly that's not going to change anything in the long-term. Well, it was an inconsistent one. Released datas since the end of 2013 have already shown the prospect of good economic recovery in the US future.    

President of The Fed Richmond, Jefrey Lacker, predicted that The Fed won't be deterred by just one unemployment report, and hoped that discussion on the next tapering will be an agenda in the next FOMC meeting. He also said that, ...in my experience, one employment report rarely has an effect by itself on monetary policy. Research center Capital Economics also predicted that The Fed won't worry too much on this recent data, and fully expected further tapering announcement in the next FOMC meeting this month. However, their prediction based on unemployment rate that's in its five year low.

Nevertheless, there are some who think that this will influence The Fed. Rob Carnell mentioned that the Fed may want to postpone the announcement of further tapering, until it's celar that the NFP was just a one time event. Carnell reckoned that the US employment report was really bad, with some good bits. So, is Greenback's going up, or not?

Anomaly or Alarm?
One bad data is not a signal that the trend's going down, but still, we can't ignore it just like that. Who knows if it's an early warning? Therefore, we should see more datas to understand whether it is an anomaly or an alarm.

Some strong impact datas due to be released this week are US Advance Retail Sales tonight, and CPI Inflation and initial jobless claims on Thursday. Retail Sales and Initial Jobless Claims has strong impact on USD, but their impact on economy is relatively small, because their time-range is so short (Retail Sales is monthly and jobless claims is weekly). Actually, the two of them are predicted to raise. However, if you are someone who trade by seeking momentums, take good care of yourself and becareful of another 'anomaly'.

On the other hand, CPI is an indicator that has strong impact in short and long term, be it in forex or in real economy. Low CPI will be an alarm, because some analysts have warned of the possibility of major deflation coming to the US in 2014. If you wanted to know the prospect of USD in a longer period, you should observe this one and The Fed carefully.
Bernanke
The Fed's decision in the upcoming 28-29 January 2014 FOMC Meeting will not only be based on this one NFP. If traders make decision almost instantly, then The Fed tend to decide more carefully by counting all the pros and cons. In this case, we should consider the influence of Yellen who is a famous dovish and one of the architects behind the infamous Stimulus Program. She, probably is going to maintain the current stimulus. Nevertheless, the FOMC minutes released in January 8 mentioned that they saw the diminishing benefit of stimulus and are concerned on its risk toward financial stability. Because of this, analysts from Bloomberg predicted the Fed will continue reducing stimulus by 10billion USD in the next seven meetings, and end it for good at December. This is, of course, only if December NFP was really just an anomaly.

What's your opinion on this topic? Give us your words.