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U.S. Dollar Advances Following Upbeat Jobs Data

U.S. Dollar Advances Following Upbeat Jobs Data

Following the release of upbeat U.S. employment data, the value of the U.S. moved to the upside during trading on Friday.

The U.S. dollar index is trading at 92.77, up 0.6 percent from the previous close.

The greenback is trading at 110.22 yen versus the 109.77 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1761 compared to yesterday’s $1.1834.

The strength in the value of the dollar came after the Labor Department released a report showing stronger than expected job growth in the month of July.

The Labor Department released a report showing 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.

The stronger than expected job growth was partly due to sharp increases in employment in leisure and hospitality and local government education, which shot up by 380,000 jobs and 221,000 jobs, respectively.

Reflecting the strong 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.

Last week, Federal Reserve Chair Jerome Powell indicated further progress was needed in labor market recovery before the central would consider scaling back stimulus.

“We had thought that continued slow progress on the employment recovery would see the Fed hold off tapering its asset purchases until early next year,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He continued, “But with Board members Richard Clarida and Christopher Waller both recently suggesting a run of stronger jobs growth would be enough to meet the threshold of ‘substantial further progress,’ the risks may now be titled towards that process beginning sooner than we had expected.”

Next week’s trading may be impacted by reaction to reports on consumer and producer price inflation, which could further impact the outlook for monetary policy.

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