The EURUSD currency pair was down over 50 pips as the US dollar rallied against the euro following the release of upbeat US non-farm payrolls data in the North American trading session. The currency pair had risen earlier during the trading day on positive Eurozone data before reversing course after the NFP data.
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The US dollar rallied against its peers after the non-farm payroll data indicated that the United States added 517,000 non-farm jobs in January, beating analysts' expectations of 185,000 new jobs by a wide margin. The data fueled a rally in the greenback as the upbeat jobs data demonstrated the strength of the US economy.
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The world’s largest economy also saw its unemployment rate fall to 3.4% beating analysts' expectations of 3.6% and the previous figure of 3.5%. Investors cheered the news, which shows that despite the Fed’s aggressive rate hikes, the US economy remains strong.
Today’s employment data was significant given that many large companies are firing employees. Yet, some companies are hiring employees, as evidenced by the over half a million jobs created in January.
The US companies hiring employees might be small to medium-sized enterprises that may not have significant exposure to the global economy, unlike the large tech and industrial companies that derive a significant portion of their revenues from outside the United States.
Earlier today, data from multiple EU countries had boosted the euro, including the upbeat industrial production data from France, which expanded by 1.1% beating consensus estimates of a 0.2% increase.
IHS Markit also released the services and composite PMIs for Germany, France, Italy and Spain, which are the EU’s largest economies. All the PMIs were better than expected, allowing the Eurozone Services PMI to beat analysts’ estimates by 0.1% to reach 50.8%.
The PMIs had driven the euro higher against the dollar. However, the upward trend quickly reversed after the US jobs data blew past consensus estimates by a wide margin.
Investors are looking forward to next week as several policymakers from the Federal Reserve are expected to speak. Their speeches could have a significant impact on the dollar’s performance.
*This is not investment advice.
The EURUSD price chart.
The EURUSD currency pair was trading down 53.0 pips (0.47%) as the US dollar rallied against the euro.
YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.