Strong Jobs Data Buoys Dollar
01 Juin 2018 - 11:51AM
RTTF2
The U.S. dollar strengthened against its major counterparts in
the European session on Friday, as U.S. job growth beat forecasts
in May and jobless rate remained at a 17-year low.
Data from the Labor Department showed that non-farm payroll
employment surged up by 223,000 jobs in May after climbing by a
downwardly revised 159,000 jobs in April.
Economists had expected employment to increase by 188,000 jobs
compared to the addition of 164,000 jobs originally reported for
the previous month.
With the jump in employment, the unemployment rate edged down to
3.8 percent in May from 3.9 percent in April. The unemployment rate
had been expected to come in unchanged.
The currency rose against its major rivals in the Asian
session.
The greenback strengthened to 109.67 against the yen, a 3-day
high. The next possible resistance for the greenback is seen around
the 111.00 area.
The latest survey from Nikkei showed that Japan manufacturing
sector continued to expand in May, albeit at a slower rate, with a
manufacturing PMI score of 52.8.
That's down from 53.8 in April, although it remains well above
the boom-or-bust line of 50 that separates expansion from
contraction.
The greenback appreciated to a 2-day high of 0.9897 against the
Swiss franc, from a low of 0.9841 seen at 6:45 pm ET. The greenback
is likely to find resistance around the 1.00 area.
The greenback bounced off to 1.1648 against the euro, from a low
of 1.1718 hit at 6:00 am ET. Next key resistance for the greenback
is likely seen around the 1.15 level.
Final data from IHS Markit showed that the upturn in the
Eurozone manufacturing sector showed further signs of cooling in
May, as initially estimated.
The factory Purchasing Managers' Index fell to a 15-month low of
55.5 from 56.2 in April. The score matched the flash estimate of
55.5.
The greenback strengthened to 2-day highs of 0.6961 against the
kiwi, 1.3008 against the loonie and 0.7514 against the aussie, from
its early lows of 0.7020, 0.7573 and 1.2932, respectively. The
greenback is poised to challenge resistance around 0.68 against the
kiwi, 1.31 against the loonie and 0.74 against the aussie.
On the flip side, the greenback dropped to 1.3338 against the
pound, reversing from a 2-day high of 1.3254 set at 1:00 am ET. If
the greenback continues its fall, 1.35 is possibly seen as its next
support level.
Survey data from IHS Markit and Chartered Institute of
Procurement & Supply showed that the UK manufacturing sector
expanded at a faster pace in May.
The manufacturing Purchasing Managers' Index rose unexpectedly
to 54.4 in May from a 17-month low of 53.9 in April. The score was
expected to drop to 53.5.
The U.S. construction spending for April and ISM manufacturing
index for May are due shortly.
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