Currency News: Dollar Rebounds On Strong US Jobs Data
Currency News
The US dollar surged to a 13-year high against the yen on Friday after a strong report from the Labor Department on US jobs data. The dollar also rebounded against the euro, paring most of the losses the dollar incurred last week. The dollar had fallen against other currencies as investors were unsure if the Federal Reserve would raise interest rates, but the recent data points to interest rates being increased for the first time since 2008 in September.
In the month of May, the US economy added 280,000 jobs, more than the 225,000 that analysts had been expecting. Hourly earnings also increased 0.3% in May, a figure that the Fed is keeping an eye on ahead of an a potential interest rate hike. The data caused the dollar to increase 1% against the yen to 125.62 yen per dollar, the highest level since May 20th, 2002. The dollar also increased 1.1% against the euro on Friday, paring losses from last week nearly in half.
The better-than-expected US jobs data has pointed to the poor economic development from the first three months of the year being an aberration, most likely caused by the poor weather. With the economy rebounding over the last two months, an interest rate hike in September looks more likely, which makes the dollar more attractive to yield-hungry investors. The dollar also climbed to its highest level ever against the Mexican peso, while it reached its highest level against the South African Rand since December 2001.
