US Dollar Higher After Solid Jobs Data

Canbera-Australia (Aug 7)  The US dollar climbed against its major rivals on Friday, trimming recent losses, as non-farm payroll employment increased notably in July and jobless rate held steady at a seven-year low, bolstering hopes that September hike by the Federal Reserve in on track.

According to a report released by the  Labor Department  , non-farm payroll employment rose by 215,000 jobs in July following an upwardly revised increase of 231,000 jobs in June.

Economists had expected employment to climb by about 223,000 jobs, which would have matched the increase originally reported for the previous month.

The report also said the unemployment rate held at 5.3% in July, unchanged from the seven-year low set in June. The unchanged reading matched economist estimates.

With the economy showing consistent improvement, the Fed officials have hinted that the timing of rate hike is edging close. Traders are betting that the Fed may raise rates as early as next month, given steady improvement in the economy.

The currency has been trading higher in the Asian session, amid prospectus for higher rates in the US

In European deals, the greenback advanced to 1.5474 against the Sterling, reversing from a low of 1.5545 hit at  8:25 am ET  . The greenback is seen finding resistance around the 1.54 mark. The pair was valued at 1.5511 at yesterday's close.

Data from the  Office for National Statistics  showed that the  UK  visible trade deficit widened in June.

The visible trade deficit increased to  GBP 9.2 billion  in June from  GBP 8.4 billion  in May. But it was smaller than the expected shortfall of  GBP 9.3 billion  .

The greenback spiked up to a 4-1/2-month high of 0.9882 versus the franc and approached 125.06 against the yen, its highest since  June 8  , reversing from its recent low of 0.9788 and a 2-day low of 124.29, respectively. The greenback closed yesterday's trading at 0.9804 against the franc and 124.72 against the yen. On the upside, the greenback may challenge resistance around 1.00 against the franc and 126.00 against the yen.

The greenback appreciated to a 2-day high of 1.0860 against the European currency, following a 3-day decline to 1.0973 immediately before the release of the data. Further uptrend may likely lead the greenback to a resistance surrounding the 1.07 zone.

Provisional data from Destatis revealed that  Germany's  industrial production logged an unexpected decline in June.

Industrial production dropped 1.4% month-on-month in June, which was the biggest fall since August, when it declined 2.8%. It was expected to rise 0.3%.

The greenback was trading higher at 1.3183 against the loonie, 0.6529 against the kiwi and 0.7346 against the aussie, off its early weekly low of 1.3053, 3-day lows of 0.6587 and 0.7396, respectively. The greenback is poised to challenge resistance around 1.33 against the loonie, 0.64 against the kiwi and 0.72 against the aussie.

Looking ahead,  Canada's  Ivey PMI data for July is due at  10:00 am ET.

Source: AllianceNews