US dollar is heading higher today following the most recent payrolls data. The result is adding a bit of confusion, though, since it muddies the water as to what might be next for the Federal Reserve.
The nonfarm payrolls report for May is in for the United States, and the result has surprised analysts. Payrolls showed an increase of 175,000, even though the unemployment rate ticked higher, to 7.6 per cent.
The result is that the greenback is now strengthening against its major counterparts, when earlier it was weaker. Ahead of the report, the dollar dropped to a two-month low against the yen. However, since the payrolls surprised to the upside, all of those earlier losses have been erased.
Dollar is also higher against the euro and the pound today as Forex traders once again speculate that perhaps the Federal Reserve might consider reducing its asset purchase plan sooner rather than later. Dollar had faltered the last couple of days on assumptions that easing measures would have to be kept in place. Now, in the confusion, there is some thought that maybe the easing measures will be reduced.
At 14:20 GMT EUR/USD is down to 1.3217 from the open at 1.3245. GBP/USD is down to 1.5519 from the open at 1.5600. USD/JPY is up to 97.1875 from the open at 96.9900, and up from the session low of 94.9700.
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