The latest jobs report from the private sector indicates that the economy ramped up in terms of hiring during the month of June. This news is providing a boost to the economy, as well as providing a basis for speculation that the Federal Reserve will have to accelerate its tightening schedule soon. This expectation is providing a boost to the US dollar.
Greenback is higher today, thanks in large part to the latest jobs data. Automatic Data Processing (ADP) reports that the US economy added 281,000 private sector jobs in June. ADP’s report beat the expected 210,000 jobs by a fair margin, and is providing a basis for optimism about what’s next for the US economy.
Many think that the Federal Reserve will have to move to reduce interest rates sooner rather than later, and take other steps to reduce quantitative easing. Fed leaders have made it a point to focus on jobs, and a firming labor market means that the US dollar could potentially become stronger as policy divergence becomes more pronounced.
At 12:50 GMT the US dollar index is up to 79.9810 from the open at 79.8160. EUR/USD is down to 1.3646 from the open at 1.3679. GBP/USD is also lower, down to 1.7147 from the open at 1.7149. USD/JPY is higher, gaining to 101.7020 from the open at 101.5240.
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