Stellar Non-Farm Payrolls Lead to Rally of US Dollar

The US dollar rallied against the basket of major currencies today after the stellar non-farm payrolls that have exceeded even optimistic forecasts. The currency gained more than 1 percent and climbed to the highest level in almost 13 years against the Japanese yen.
US non-farm payrolls grew by whooping 280,000 jobs in May versus the consensus forecast of 222,000. Positive reading was certainly not a surprise to market participants after the previous positive employment reports from the United States, but few had expected it to be so good. Despite the huge employment growth, the unemployment rate unexpectedly ticked up by 0.1 percentage point to 5.5 percent.
The amazing NFP led to speculations that the Federal Reserve will hike interest rates as soon as September, though the majority of speculators bet on an October hike. Whatever the case, the outlook for the dollar is hugely optimistic, allowing the currency to log substantial gains today.
Also helping the greenback was the news that Greece delayed its payment to the International Monetary Fund.
EUR/USD dropped from 1.1237 to 1.1107 (1.2 percent) as of 16:14 GMT today. GBP/USD tumbled from 1.5359 to 1.5265. USD/JPY climbed from 124.35 to 125.53, trading near the highest level since December 2002.

If you have any questions, comments or opinions regarding the US Dollar,
feel free to post them using the commentary form below.

Leave a Reply

Your email address will not be published. Required fields are marked *