Nonfarm Payrolls Do Not Harm Dollar to a Great Extent
The US dollar closed somewhat lower against the euro today as favorable non-farm payrolls spurred a wave of risk appetite across the Forex market. The US currency managed to jump versus the Great Britain pound and retained its gains against the Japanese yen.
The positive nonfarm payrolls turned the Forex, as well as other markets, to a risk-on mode. The Standard & Poor’s 500 Index of stocks rose 0.7 percent. The greenback felt some downside pressure and the Dollar Index declined 0.3 percent.
Yet losses of the dollar were not as big as one might expect. The truth is that traders were not sure that the fall of unemployment is bad for the US currency. In fact, the opposite may be true as the Federal Reserve will have less incentive to keep its accommodative policy if unemployment does keep falling.
EUR/USD closed at 1.3027 after rallying from 1.3016 to 1.3070 — the highest price since September 19. GBP/USD dropped from 1.6189 to 1.6128, following the rise to the daily maximum 1.6215, the highest since September 28. USD/JPY rose from 78.46 to the closing price of 78.64, while its intraday high of 78.85 was the highest since September 19.
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