The US dollar jumped today as growth of nonfarm payrolls exceed forecasts, suggesting that the Federal Reserve can reduce stimulus without damaging the economy too much.
US non-farm payrolls grew by 195,000 in June, maintaining the same rate of expansion as in the preceding month. Experts have predicted an increase by just 163,000. At the same time, the unemployment rate stayed at 7.6 percent, disappointing market participants who have expected a decrease to 7.5 percent.
Traders watch US employment data closely, hoping to guess when the Fed will be ready to trim its quantitative easing. Today’s data supported the view that tampering of QE is not far away, but it was not good enough to think that the reduction will happen very soon. The Dollar Index reached the highest level in three years.
EUR/USD sank from 1.2911 to 1.2836 as of 15:32 GMT today and its daily low of 1.2804 was weakest since May 15. GBP/USD tumbled from 1.5068 to 1.4902, while its daily minimum of 1.4855 was lowest since March 12. USD/JPY advanced from 100.02 to 100.92.
If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.