US Dollar Weakens on Very Bad Payrolls

The US dollar weakened today against most major currencies after the government report showed that growth the US non-farm payrolls was much lower than predicted and the unemployment rate unexpectedly increased. The US currency advanced versus the euro.

The 
non-farm payrolls added only 18,000 in June, while the expected value was 97,000. The unemployment rate edged up from 9.1 percent to 9.2 percent. The growth of the payrolls was lowest in 9 months, while the unemployment rate was highest this year.

The depressing unemployment data was a total surprise to market participants, considering the yesterday’s positive report from Automatic Data Processing. Usually, payrolls follow trend showed by ADP employment report. This time, however, these two reports showed a completely different picture of the labor market in the US.

USD/JPY closed today at 80.58 after opening at 81.22 and climbing to 81.47. USD/CHF dropped from 0.8440 to 0.8359. Meanwhile, EUR/USD went down from 1.4361 to 1.4262.

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