European Session – US dollar rallies after nonfarm payrolls beat estimates
November 8, 2013 2:39 pm
The US dollar rallied after a stronger-than-expected employment report. US nonfarm payrolls for October increased by a surprisingly strong 204 thousand, whereas economists were expecting a rise of only 125 thousand.
It was the first time in 9 months that nonfarm payrolls exceeded 200 thousand. There were also positive revisions to the previous 2 months’ figures totaling 60 thousand jobs.
Other aspects of the employment report were not as strong however. The rate of unemployment rose to 7.3% from 7.2% the previous month, average earnings rose 0.1% month-on-month, less than the 0.2% expected and the average workweek fell by 0.1 hours to 34.4 hours.
More positive was the boost to manufacturing payrolls by 19 thousand, the strongest rise since February.
The takeaway from the US employment report was that the US economy did not suffer the blow that was initially feared because of the 16-day government shutdown during October.
Hence, it was possible that the Federal Reserve would begin to taper its monetary stimulus as soon as December.
The euro slipped 0.12% to trade at 1.3389 against the dollar, having dropped to as low as 1.3355 in volatile trading. The dollar gained versus the yen, rising 0.48% to 98.56.
In other news that were released earlier in the European session, France’s credit rating was downgraded by Standard and Poor’s, to AA from AA+. There was additional negative news from France as September industrial production fell 0.5% month-on-month in September.
Sterling fell against the dollar during the session, dropping back by 0.37% to 1.6033.
The US dollar rallied after a stronger-than-expected employment report. US nonfarm payrolls for October increased by a surprisingly strong 204 thousand, whereas economists were expecting a rise of only 125 thousand.
It was the first time in 9 months that nonfarm payrolls exceeded 200 thousand. There were also positive revisions to the previous 2 months’ figures totaling 60 thousand jobs.
Other aspects of the employment report were not as strong however. The rate of unemployment rose to 7.3% from 7.2% the previous month, average earnings rose 0.1% month-on-month, less than the 0.2% expected and the average workweek fell by 0.1 hours to 34.4 hours.
More positive was the boost to manufacturing payrolls by 19 thousand, the strongest rise since February.
The takeaway from the US employment report was that the US economy did not suffer the blow that was initially feared because of the 16-day government shutdown during October.
Hence, it was possible that the Federal Reserve would begin to taper its monetary stimulus as soon as December.
The euro slipped 0.12% to trade at 1.3389 against the dollar, having dropped to as low as 1.3355 in volatile trading. The dollar gained versus the yen, rising 0.48% to 98.56.
In other news that were released earlier in the European session, France’s credit rating was downgraded by Standard and Poor’s, to AA from AA+. There was additional negative news from France as September industrial production fell 0.5% month-on-month in September.
Sterling fell against the dollar during the session, dropping back by 0.37% to 1.6033.
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