U.S. Jobs Report Boosts Dollar and Other Top Forex News.
The dollar ended the week on a high note after relatively positive U.S. employment data showed that the U.S. economy is slowly recovering from its slumber.
The U.S. Labor Department said the economy added 217,000 jobs in May, just below expectations for a 218,000 increase, after a 282,000 rise in April, whose figure was revised down from a previously estimated 288,000 gain.
The report also showed that private sector added 216,000 jobs last month, exceeding expectations for a 210,000 gain, after a downwardly revised 270,000 increase in April.
While the U.S. unemployment rate remained unchanged at 6.3% last month, compared to expectations for a rise to 6.4%.
The news was mostly positive for the U.S. dollar which found support against the other major currencies.
The Japanese yen was stuck in tight ranges for most of the session and showed little appetite for breaking out.
USD/JPY closed the session up 0.16% at 102.58.
Meanwhile, the euro remained under pressure after the European Central Bank lowered its benchmark interest rate to a record-low 0.15% from 0.25% following yesterdays central bank policy meeting.
The bank also announced that it will be conducting a series of Targeted Longer Term Refinancing Operations (TLTROs) to support bank lending in the euro zone.
In other news, the German trade surplus widened to €17.7 billion in April, from €15.0 billion in March, whose figure was revised up from a previously estimated surplus of €14.8 billion. Analysts had expected the trade surplus to widen to €15.2 billion in April.
The news sent the euro lower, with EUR/USD closing the session down -0.17% at 1.3638.
While the pound also suffered after official data showed that the U.K. trade deficit widened to £8.92 billion in April, from £8.29 billion in March, whose figure was revised from a previously estimated deficit of £8.48 billion. Analysts had expected the trade deficit to widen to £8.65 billion in April.
Separately, the Bank of England said consumer inflation expectations for the next year fell to 2.6% in the first quarter, from 2.8% in the three months to December.
GBP/USD closed the session down -0.08% at 1.6806.
Elsewhere, the greenback strengthened against the Canadian dollar following news that Canada’s unemployment rate unexpectedly rose to 7.0% last month, from 6.9% in April. Analysts had expected the rate to remain unchanged in May.
However, Statistics Canada said the economy added 25,800 in May, just above expectations for a 25,000 rise, after a 28,900 decline the previous month.
USD/CAD closed the session up 0.06% at 1.0930.
Meanwhile the Australian dollar was buoyed overnight by the ECB’s decision to lower interest rates in the eurozone, but the Aussie gave up gains after the release of this mornings positive U.S. jobs data.
AUD/USD ended the session down -0.02% at 0.9338.
While the New Zealand dollar was also higher overnight, but it managed to hold on to gains throughout the session.
NZD/USD closed the session virtually unchanged -0.01% at 0.8499.
More coverage of today’s session.
- FT: U.S. employment passes pre-recession peak. – Employment in the US has finally exceeded the pre-recession peak of 138.4m jobs set in January 2008 with the creation of 217,000 new positions in May.
- FT: Euro withstands ECB’s easing onslaught. – If the European Central Bank sees a weaker euro as a crucial weapon in its fight against deflation, policy makers will be gritting their teeth at the initial market reaction to the measures its president, Mario Draghi, unveiled on Thursday.
More Top Stories:
Investing.com: Here’s why the EUR hasn’t tanked. – The measures announced by the ECB included a cut in its key interest rate to a record low of 0.15% and the deposit rate – to -0.1%, 2 rounds of targeted LTROs and suspension of SMP sterilization. All this was expected. We have been talking about this for weeks, so there’s actually nothing new and really not too much cause for the euro to weaken.
Businessweek: Canadian dollar weakens after jobless rate unexpectedly rises. – The Canadian dollar weakened after a report showed the nation’s unemployment rate unexpectedly rose and full-time employment declined last month, bolstering the central bank’s wary outlook on the economy.
SMH: Australian dollar buoyed by ECB’s negative rates. – The European Central Bank’s landmark decision to cut rates to historic lows has pushed the Australian dollar to its highest point against the euro this year and experts are tipping that the bank’s measures – including unprecedented negative deposit rates – will continue to buoy the currency.
TVNZ: NZ dollar rises as investors chase yield. – The New Zealand dollar rose as investors sought bigger returns after the European Central Bank cut its key deposit rate into negative territory, and ahead of US employment figures.
Businessweek: Gold futures trade steady as U.S. adds more jobs in May. – Gold futures fell the most in a week as equities advanced, diminishing demand for the precious metal as an alternative investment.