Dollar Strengthens on Employment & Services PMI Reports

The US currency rose today against the euro and the Japanese yen after the reports showed that the US employers added more jobs than expected and the service industries expanded with increasing pace.

The US non-farm payrolls increased by 42,000, as was reported by ADP Employer Services. The median forecast was the 38,000 growth. The non-manufacturing sector grew in July for the seventh consecutive month, as was shown by the non-manufacturing index, which registered 54.3 percent in July, compared to 53.8 percent registered in June. The figure above 50.0 indicates industry expansion, below indicates contraction.

The employment was the one of the main sources of concerns for the US citizens. Therefore, the good news from the labor market improved the outlook for the US economy significantly. The Federal Reserve acknowledges the slowdown of the economy, but may refrain from adding more stimulus after the reports suggested that the US economy is healthier than it looked previously.

EUR/USD traded near 1.3137 as of 17:13 GMT today after it opened at 1.3229. USD/JPY rose to 86.22 from 85.76 after slumping as low as 85.32.

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