The US dollar today rallied against its main peers such as the euro and the British pound after the release of positive Services PMI data. The US dollar recovered from a poor showing after the release of non-farm payrolls data in the early North American session.
The US dollar’s performance against a basket of its main peers, as tracked by the US Dollar Index, improved later during the session as the DXY hit a high of 95.01.
The greenback opened the American session much weaker against its main peers as the Dollar Index hit lows below 94.50. The currency’s poor performance was largely triggered by the non-farm payrolls report released by the Bureau of Labor Statistics. The report indicated that the country added 261,000 new jobs in October as opposed to the expected 313,000 jobs, although this was a major improvement from the 18,000 jobs reported in September. Furthermore, the unemployment rate was lower than expected as it was recorded at 4.1%, versus the expected 4.2% rate, but the DXY still trended lower.
The release of the US ISM Non-manufacturing/Services Composite PMI for October a few hours later was what reversed the greenback’s fortunes. The PMI was recorded at 60.1, which was higher than the expected 58.5 and the previous 59.8. Overall, the releases from the US docket were positive showing that the US economy is improving, which boosted the greenback.
The greenback’s future performance is likely to be affected by political events in the US and its partner countries given the upcoming weekend.
The EUR/USD currency pair was trading at 1.1617 as at 15:45 GMT having dropped from a high of 1.1691. The GBP/USD currency pair was trading at 1.3073 having declined from a high of 1.3132.
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