It could be pointed out again that the US employment report is a very volatile time series and therefore tends to contain more noise than signal. One could also point out that the time series tends to be revised a lot after the first publication, which adds to the noise, Commerzbank’s FX strategist Volkmar Baur notes.

The labor market is now more in the Fed's focus

“But you could also just admit that it's just the way it is: every first Friday of the month, the market is transfixed by the US employment report. And so, it will be today. Especially after the Federal Reserve (Fed) Chairman Powell emphasized on Wednesday that the labor market is now more in the Fed's focus. We already got a small taste of this yesterday.”

“A weak ISM manufacturing report and in particular a very weak employment component (which fell from 49.3 to 43.4) caused the dollar to weaken briefly on a day when the greenback was otherwise in demand. However, traders seemed to quickly remember that less than one in ten (8.2%) people in the US work in manufacturing and that the labor market is dominated by the service sector.”