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Dollar Appreciates As U.S. Jobless Rate Falls Sharply

Dollar Appreciates As U.S. Jobless Rate Falls Sharply

The U.S. dollar moved up against its major counterparts in the European session on Friday, after a data showed that the nation’s employment continued to rebound in August, while the unemployment rate fell, signaling an improvement in the labor market from the coronavirus crisis.

Data from the Labor Department showed that non-farm payroll employment surged up by 1.371 million jobs in August compared to economist estimates for a jump of about 1.400 million jobs.

The report also showed the spike in employment in July was downwardly revised to 1.734 million jobs from the previously reported 1.763 million jobs.

The unemployment rate dropped to 8.4 percent in August from 10.2 percent in July, while economists had expected the rate to dip to 9.8 percent.

Recently, U.S. House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin agreed for stop-gap funding to avert a government shutdown at the end of the month.

The deal would extend government funding despite ongoing conflicts over stimulus relief package.

The currency held steady against its major rivals in the Asian session, except the pound.

The greenback registered a 0.5 percent gain against the pound to hit a 1-week high of 1.3210. The GBP/USD pair had ended yesterday’s trading session at 1.3280. Further rally in the currency may challenge resistance around the 1.28 region.

Survey results from IHS Markit showed that the UK construction sector growth moderated in August from a near five-year high largely due to the lack of new work to replace completed contracts.

The IHS Markit/Chartered Institute of Procurement & Supply construction Purchasing Managers’ Index fell unexpectedly to 54.6 in August from 58.1 in July.

The USD/CHF pair gained 0.5 percent, touching 0.9137. The pair was quoted at 0.9093 at yesterday’s close. The greenback is likely to locate resistance around the 0.94 region.

The greenback was higher by 0.4 percent against the euro, at 1.1802. The pair was worth 1.1851 when it closed deals on Thursday. Should the currency rallies again, 1.16 is possibly seen as its next resistance level.

Data from Destatis showed that German factory orders growth moderated more than expected in July.

Factory orders increased 2.8 percent on a monthly basis, much slower than the 28.8 percent rise in June and economists’ forecast of 5 percent.

The greenback added 0.4 percent to 106.48 against the yen, after having dropped to 106.06 at 7:15 pm ET. The pair had finished Thursday’s deals at 106.18. Next near term resistance for the greenback is found around the 108.00 level.

The U.S. currency reached as high as 0.6688 against the kiwi, setting a 1-week high. This marked a 0.3 percent gain from yesterday’s closing value of 0.6711. The greenback may face resistance around the 0.63 region.

The greenback spiked up to an 8-day high of 0.7241 against the aussie, up by 0.8 percent from a low of 0.7296 seen at 6:00 am ET. The greenback was worth 0.7272 per aussie at Thursday’s New York session close. Extension of the greenback’s uptrend may lead it to a resistance around the 0.70 region.

Data from the Australian Bureau of Statistics showed that Australia retail sales advanced a seasonally adjusted 3.2 percent on month in July.

That was shy of expectations for an increase of 3.3 percent and was up from 2.7 percent in the previous month.

After falling to 1.3078 at 8:15 am ET, the greenback rebounded modestly versus the loonie and was trading at 1.3130. At yesterday’s close, the greenback was quoted at 1.3127 against the loonie. Immediate resistance for the dollar is likely seen around the 1.34 level.

The material has been provided by InstaForex Company – www.instaforex.com