US Dollar Rallies on Better than Expected Change in Nonfarm Payrolls
US non-farm payrolls for April saw the biggest rise in three months and gave the US Dollar a major boost against most of the other major currencies.
The change in payrolls was reported at 165 thousand, beating expectations for 140 thousand and higher than the revised 138 thousand rise in jobs seen in March. The unemployment rate was reported at 7.5% in April, the lowest rate since December 2008, and better than expectations for the unemployment rate to remain at 7.6%. Average hourly earnings rose 0.2% in April.
The Fed announced earlier this week that it is ready to change the pace of its asset purchases based on unemployment and inflation. The tone of the comments was slightly more dovish than previous months, following the relatively smaller job growth reported in March. Annual inflation was reported for March at 1.5%, below the Fed’s 2% target inflation rate. Therefore, improved growth in employment numbers is USD positive, as it may lead to the Fed cutting its quantitative easing program.
The US Dollar rose about 100 points against the Japanese Yen, rising above 99.00 for the first time in a week. USD/JPY may next see resistance around 100.00, which hasn’t been broken in four years. Support may continue to be provided around 97.00.
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USDJPY4-Hour: May 03, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
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