US Dollar Rocketing Higher with Yields on Solid NFP Report
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US DOLLAR OUTLOOK: USD PRICE ACTION SNAPPING HIGHER ALONGSIDE TREASURY YIELDS AS FEBRUARY 2021 NFP REPORT TOPS FORECAST
- US Dollar trading on its front foot headed into the opening bell on Wall Street
- Surging Treasury yields remains the talk of the town and supportive of the USD
- February 2021 Nonfarm Payrolls showed 379K job gains, unemployment at 6.2%
The US Dollar has tacked on to its recent string of gains so far during Friday’s trading session. US Dollar strength looks broad based across the major currency pairs and leaves the DXY Index up roughly 0.6% headed into the New York opening bell. USD price action has turned higher largely on the back of surging Treasury yields and relatively more attractive interest rate differentials. This move accelerated yesterday in response to lack of pushback from Federal Reserve Chair Jerome Powell on rising long-term borrowing costs. That said, traders are also digesting the latest round of monthly jobs data detailed in the February 2021 nonfarm payrolls report.
CHART OF FEBRUARY 2021 NONFARM PAYROLLS DATA
Chart Source: DailyFX Economic Calendar
The NFP report just crossing the wires revealed a solid beat relative to market forecasts. The headline change in nonfarm payrolls saw an increase of 379,000 jobs and the unemployment rate hold steady at 6.3%. This compares to estimates looking for 182,000 job gains and the unemployment rate to tick slightly lower to 6.2%.
US DOLLAR INDEX PRICE CHART WITH TEN-YEAR TREASURY YIELD OVERLAID: 1-HOUR TIME FRAME (26 FEB TO 05 MAR 2021)
The US Dollar Index continues to rocket higher thanks to the overall solid employment figures found in the NFP report. This catapulted the DXY Index past nearside technical resistance posed by the 92.00-price level, which is underpinned by the lows from late August and early September last year. As such, it appears that US Dollar bulls remain comfortably in the drivers seat with surging Treasury yields largely fueling the bid.
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