Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Forex - U.S. Dollar Surges on Strong Jobs Report

Published 07/05/2019, 10:31 AM
Updated 07/05/2019, 11:00 AM
© Reuters.

Investing.com - The U.S. dollar jumped on Friday after the economy added more jobs than expected in June, dampening expectations that the Federal Reserve will cut rates aggressively to stave off a slowdown.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, jumped 0.7% to a three-week high of 96.968 by 10:31 AM ET (14:31 GMT).

Nonfarm payrolls rose by 224,000 in June, well above consensus expectations for 160,000 and a sharp rebound from a downwardly-revised 72,000 in May.

The euro and sterling both lost over half a cent against the dollar on the news, the euro falling as low at $1.1208 and the pound falling to a six-month low of $1.2482.

"Taking it all together, it is an encouraging report that suggests the broad economy is currently shrugging off the U.S.-China trade uncertainty,” ING Chief International Economist James Knightley wrote in a blog post.

The Fed opened the door at its last policy meeting for a rate cut to mitigate the effects of the U.S.'s various trade disputes, and is expected to cut rates by 25 basis points in July, with traders expecting a total of three rate cuts this year.

“The resilience of the U.S. jobs market is a key reason why we believe risks are skewed towards more modest Fed policy loosening relative to market expectations,” Knightley said.

The dollar was higher against the Japanese yen, with USD/JPY rising 0.8% to 108.58. Against the loonie, the dollar gained 0.6% to 1.3129 after data showed that the Canadian economy lost 2,200 jobs in June.

The data also caused the dollar to bounce against emerging market currencies, which have benefited most from the Fed's recent pivot to an easing bias. It rose 0.6% against the Brazilian real after hitting a three-month low against it on Thursday, while it also rose 1.3% against the Argentinian peso and 0.2% against the Mexican peso.

Latest comments

Only 3k above reading is not a strong job report. It's barely making the forecast.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.