US Dollar Surges to Fresh Yearly Highs after Tremendous Labor Report
The US economy continues to show signs of further momentum, with a very impressive February labor market report beneath its belt. The monthly Nonfarm Payrolls report showed the economy added +236K jobs, well-above the forecast of +165K, according to Bloomberg News. Even though the January print was revised lower to +119K from +157K, the net gain overall still was +41K jobs, nearly a quarter of the initial January print.
Similarly, the Unemployment Rate dropped to its lowest level since December 2008, at 7.7%, from 7.9%, even though the drop may have been in part stoked by a slimmer labor pool. Overall, employment climbed significantly in the following sectors: construction, retailers, and healthcare, as well as business services like temp work. Needless to say, the report was robust overall. Perhaps the cherry on top was the slightly lower Underemployment Rate (U6), which dropped to 14.2% from 14.3%.
Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) 5-minute Chart: March 8, 2013
Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the release, the USDOLLAR rallied from a near-session high of 10507 to a fresh session high at 10573, at the time this report was written. This is also a new yearly high. Of the subcomponents of the USDOLLAR: the EURUSD fell from 1.3090 to as low as 1.2954, before rebounding to 1.2980; the GBPUSD fell from 1.5036 to as low as 1.4884, before rebounding to 1.4930; the AUDUSD fell from 1.0275 to as low as 1.0220, before rebounding to 1.0234; and the USDJPY rallied from 95.70 to as high as 96.58, a new session and yearly high.
--- Written by Christopher Vecchio, Currency Analyst
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