One of the most important events this week was today’s release of US non-farm payrolls. While analysts expected robust employment growth, the actual report turned out to be even better than was expected, spurring talks about an early interest rate hike from the Federal Reserve. The US dollar rallied against its most-traded peers as a result.
According to the payrolls, US employers added as much as 295,000 jobs in February while analysts expected the same rate of increase as in January (240,000.) The unemployment rate fell to 5.5 percent (more than was expected), reaching the lowest level in six and a half years. The only disappointment came from average hourly earnings that rose only marginally, trailing forecasts.
The stellar economic data led to speculations that the Fed will drop the word ‘patience’ in its next statement. This, in turn, would mean that the central bank may increase interest rates as soon as June. Such outlook is extremely bullish for the dollar, making it no surprise that the US currency is rising today.
EUR/USD sank from 1.1028 to 1.0875 as of 14:47 GMT today, trading near the lowest level in more than a decade. GBP/USD tumbled from 1.5238 to 1.5090 (1 percent.) USD/JPY climbed from 120.12 to 120.88.
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