US Dollar Index Pulls Back After Jobs Data

Earlier, the US dollar index had been higher, in anticipation of December’s jobs data. However, when the nonfarm payrolls report was released, it was rather disappointing and the greenback immediately began losing ground.

Economists and others had expected December’s nonfarm payrolls report to show that the economy added 193,000 jobs. However, the report instead showed that there were only 74,000 jobs added. This was such a disappointment, as the smallest monthly gain in three years. Even the fact that the unemployment rate dropped to 6.7 per cent from 7 per cent didn’t overcome this disappointment.
Many had expected the holiday season to result in more hiring, and the lower numbers came as a shock — especially after the ADP report earlier this week. As a result, the greenback dropped. Speculation that the pace of the Federal Reserve taper might slow in response to this news is circulating, and there are concerns about what could be next for the US economy.
At 14:17 GMT the US dollar index is down to 80.8570 from the open at 80.9360. The greenback has given up all of its gains against the euro, with EUR/USD is surging to 1.3643, up from the session low of 1.3570. GBP/USD is actually a little lower, dropping to 1.6460 from the open at 1.6481. USD/JPY has dropped to 104.5700 from the open at 104.8040.

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