The US dollar’s performance was quite disappointing after the release of the non-farm payroll data by the Bureau of Labor Statistics, which exceeded expectations. Contrary to market expectations of a rally by the US dollar, the currency rallied briefly before retracing most of its gains, indicating that the markets had already priced-in the positive NFP.
The US dollar rallied briefly as evidenced by the US Dollar Index, which rose to a daily high of 102.03, but later retraced its gains to trade at 101.47 at the time of writing.
The non-farm payroll data easily beating the market expectation of 200,000. The unemployment figures also declined to a low of 4.7%, which was last witnessed in November 2007, while the underemployment figure declined to 9.2%, which was last recorded in April 2008.
The greenback’s performance was also affected by the fact that the markets had already priced-in a rate hike by the Federal Open Market Committee at their March 15 meeting. The markets were expecting better NFP figures given the major increase in the February US ISM Services/Non-Manufacturing index and the ADP employment report released earlier this month.
The release of the annualized US consumer price index and the advance retail sales for February, both slated for next week, are likely to affect the greenback’s future performance.
The EUR/USD was trading at 1.0661 as at 15:42 GMT having rallied from a low of 1.0602 prior to the release of the NFP report. The USD/JPY was trading at 115.04 having dropped from a high of 115.49 prior to the announcement.
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