Home > Resource Hub > Daily Market News > US Dollar gains after strong payrolls

US Dollar gains after strong payrolls

US Dollar gains after strong payrolls

The US jobs market continues to gain momentum with a more than forecast rise in non-farm payrolls of 195,000 in June. In addition, the jobless rate held steady at 7.6% with hourly earnings in the year ending June advancing by the most since July 2011. Job gains, earnings growth and rising house values are helping to maintain growth in the economy despite increased payroll taxes and Fed spending cuts. This strong data will add to expectations the Fed will start trimming its $85 billion monthly bond purchases in September.

In the Eurozone, German industrial orders failed to rebound from the slump seen in April. Orders fell by 1.3% in May after declining 2.2% in the previous month. Domestic demand decreased by 2.0% m-o-m while orders from the rest of the Eurozone tumbled by 3.9%. This weakness is in stark contrast to the recent run of better sentiment surveys suggesting German GDP growth could soften after the forecast bounce back in Q2.

GBP/USD slumped the most last week since February and GBP/EUR hit a two month low amid speculation the BoE is ready to maintain QE stimulus. New Governor Carney signalled interest rates will be maintained low for longer than investors had expected. The UK recovery “remains weak” by historical standards and rising market borrowing costs pose a threat to the expansion, the BOE said in a statement after its July meeting.

Share this case study
Set yourself up in minutes, make payments the same day: it’s free, easy and without obligation.