Home Featured Dollar Firms As Strong U.S. Jobs Data Raises Fed Tapering Hopes

Dollar Firms As Strong U.S. Jobs Data Raises Fed Tapering Hopes

Dollar Firms As Strong U.S. Jobs Data Raises Fed Tapering Hopes

The U.S. dollar spiked higher against its major counterparts in the European session on Friday, as the nation’s job growth exceeded forecasts in July, intensifying hopes for a reduction in bond purchases by the Federal Reserve in the near future.

Data from the Labor Department showed that U.S. employment soared more than expected in the month of July.

The non-farm payroll employment spiked by 943,000 jobs in July after surging by an upwardly revised 938,000 jobs in June.

Economists had expected employment to jump by 870,000 jobs compared to the addition of 850,000 jobs originally reported for the previous month.

With the stronger than expected job growth, the unemployment rate slid to 5.4 percent in July from 5.9 percent in June, falling to its lowest level since March of 2020.

Economists had expected the unemployment rate to dip to 5.7 percent.

Fed Governor Christopher Waller said on Thursday that the central bank could withdraw stimulus measures amid rapid progress on economic recovery.

He repeated his view that a strong labor market recovery would enable the Fed to pull back policy support sooner than expected.

The greenback firmed in the Asian session, as U.S. treasury yields rose ahead of U.S. jobs data that could offer clues on the Fed’s policy moves.

The greenback gained 0.4 percent against the yen, approaching a 9-day high of 110.18. The pair had closed Thursday’s deals at 109.76. Should the greenback strengthens further, it is likely to test resistance around the 112.00 region.

Preliminary data from the Cabinet Office showed that Japan’s leading index increased to the highest since February 2014.

The leading index, which measures the future economic activity, rose to 104.1 in June from 102.6 in May.

The greenback moved higher to a 9-day high of 0.9114 against the franc, registering a rise of 0.5 percent from yesterday’s closing value of 0.9068. Further rally in the currency may find resistance around the 0.95 region.

The greenback was up by 0.5 percent against the euro, at a 9-day high of 1.1776. The pair was worth 1.1832 when it closed deals on Thursday. Next immediate resistance for the greenback is likely seen around the 1.15 level.

Data from Destatis showed that German industrial production declined unexpectedly in June.

Industrial output dropped 1.3 percent in June from May, when production was down by revised 0.8 percent. Economists had forecast production to grow 0.5 percent in June.

The greenback reached as high as 1.3890 against the pound, up 0.3 percent on the day. The pound-greenback pair had ended yesterday’s trading session at 1.3927. The greenback may face resistance around the 1.36 region.

The greenback appreciated to a 2-day high of 0.7371 against the aussie from Thursday’s New York session close of 0.7400. Next near term resistance for the greenback is found around the 0.70 level.

The greenback firmed to a 2-day high of 0.7024 against the kiwi from yesterday’s trading close of 0.7052. Extension of the greenback’s uptrend may lead it to a resistance around the 0.68 region.

The greenback was higher against the loonie, at a 2-day high of 1.2554. The greenback was trading at 1.2498 against the loonie at yesterday’s close. The greenback may test resistance around the 1.28 region, if it gains again.

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