The U.S. dollar gained versus most of its major counterparts and rose to the highest level since August 2009 against the Japanese yen as the improving situation in the labor market boosts the confidence in the economic recovery of the U.S. and helps the U.S. manufacturing to expand, further bolstering the U.S. economy.
The Labor Department reported that last month 162,000 jobs was added by employers as the previous dollar declines ensured that the labor cost in the U.S. is cheaper than in Europe or Japan, affecting business decisions. Canada, the biggest U.S. trading partner, may also profit from the rebounding U.S. economy as the rising consumer demand in the U.S. may spur exports from Canada, though the 4-day race to a parity of the Canadian dollar was halted today as the loonie has fell against the greenback.
Analysts indicated that some of 162,000 newly employed workers are temporary workers employed for conducting the 2010 census, yet the 123,000-position increase in the private payrolls is definitely a good sign. The expanding economy may prompt the Fed to raise the interest rate by the end of this year.
USD/CAD traded at 1.0101 as of 18:31 GMT up from opening level of 1.0083. USD/JPY traded at 94.53 after opening at 92.43. EUR/USD trades near 1.3484.
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