EUR/USD Drops Through $1.1100 after May US Jobs Growth Hits +280K
- US economy added +280K jobs in May.
- Unemployment rate rises as participation rate increases; wages up as well.
- EURUSD trades as low as $1.1053 after the report.
Put another check in the ‘Q1’15’s weak data was transitory’ column. The May US labor market report was solid all around, posting the second consecutive month of jobs growth >+200K, all but erasing from memory the disappointing figure seen in March (which was revised slightly higher to +119K). Notably, the May NFPs figure was the best recorded jobs growth in all of 2015, even as the unemployment rate ticked up: more citizens are entering the workforce.
The strong jobs data come at a critical time for the US Dollar, which is still trying to convince market participants that its recent lull was attributed to a temporary economic slowdown, rather than the beginning of a prolonged contraction. Data this week was mostly mixed for the greenback up to this point, but the May NFP figure will leave the US Dollar on more solid fundamental ground than it was a week ago.
Here are the data that’s sent the US Dollar to fresh daily and weekly highs versus some of its major counterparts.
- USD Change in Nonfarm Payrolls (MAY): +280K versus +226K expected, from +221K.
- USD Unemployment Rate (MAY): 5.5% versus 5.4% expected unch.
- USD Labor Force Participation (MAY): 62.9% from 62.8%.
EURUSD 1-minute Chart: June 5, 2015 Intraday
After the data releases, the US Dollar saw a brief dip across the board (as the market reaction was momentarily focused on the headline rise in the unemployment rate), but soon reverted and exploded higher (as attention to the underlying jobs growth took hold). EURUSD initially jumped from $1.1218 to as high as $1.1274, before plummeting to fresh session lows at $1.1053.
--- Written by Christopher Vecchio, Currency Strategist
To contact Christopher Vecchio, e-mail email@example.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.