Dollar Rising On Strong Employment Data

The dollar is gaining ground against all of its major rivals Friday afternoon. The currency has climbed following the release of the stronger than expected U.S. jobs report for June. However, investors still appear to be exercising some caution as they monitor the developments from the G20 economic summit in Germany.

Employment in the U.S. increased by much more than expected in the month of June, according to a closely watched report released by the Labor Department on Friday. The report said non-farm payroll employment jumped by 222,000 jobs in June following an upwardly revised increase of 152,000 jobs in May.

Economists had expected employment to climb by 179,000 jobs compared to the addition of 138,000 jobs originally reported for the previous month.

Despite the stronger than expected job growth, the unemployment rate inched up to 4.4 percent in June from 4.3 percent in May. Economists had expected the unemployment rate to hold steady.

The dollar climbed to a high of $1.1380 against the Euro Friday, but has since eased back to around $1.14.

Germany’s industrial production grew at a faster-than-expected pace in May, largely driven by energy and capital goods output.

Industrial production grew 1.2 percent month-on-month in May, faster than the revised 0.7 percent increase seen in April, Destatis reported Friday. Production has increased over the past five months. Output was forecast to grow slightly by 0.2 percent in May.

French industrial production recovered at a faster than expected pace in May, figures from the statistical office Insee showed Friday. Industrial output grew 1.9 percent in May from April, when it fell 0.6 percent. Production was forecast to grow moderately by 0.6 percent.

France’s foreign trade deficit decreased in May from a year ago, as exports grew faster than imports, data from the Customs Office showed Friday. The trade deficit narrowed to EUR 4.9 billion in May from EUR 5.6 billion in the prior month. Economists had expected the deficit to fall to EUR 5.1 billion.

France’s current account deficit decreased in May from a month earlier, data from the Bank of France showed Friday. The current account deficit dropped to EUR 2.3 billion in May from EUR 2.6 billion in April.

The buck has risen to around $1.2880 against the pound sterling Friday afternoon, from an early low of $1.2973.

The UK trade deficit widened in May from the previous month, figures from the Office for National Statistics showed Friday.

The total trade deficit increased by GBP 1 billion to GBP 3.1 billion in May, reflecting an increase in imports of goods.

The visible trade deficit widened to GBP 11.86 billion from GBP 10.59 billion in April. The expected level was GBP 10.85 billion.

UK industrial production dropped unexpectedly in May, data from the Office for National Statistics revealed Friday. Industrial output fell 0.1 percent month-on-month in May, confounding expectations for an increase of 0.4 percent and reversed a 0.2 percent rise registered in April.

Another report from the ONS showed that construction output declined 1.2 percent on a monthly basis in May, in contrast to a 0.7 percent growth economists had forecast.

UK house prices declined for the first time in five months in June, data from the mortgage lender Halifax and IHS Markit showed Friday. House prices fell unexpectedly by 1 percent on a monthly basis, reversing a 0.3 percent rise in May. This was the first decline since January. Prices were forecast to grow 0.2 percent.

The greenback has broken out to nearly a 2-month high of Y114.050 against the Japanese Yen this afternoon, from an early low of Y113.148.

Total labor cash earnings in Japan increased for the second straight month in May, and at a faster-than-expected pace, preliminary report from the Ministry of Health, Labor and Welfare showed Friday. Gross earnings rose 0.7 percent year-over-year in May, faster than the 0.5 percent climb in April. Economists had expected a 0.4 percent gain for the month.

Japan’s leading index strengthened in May, while coincident index fell from April, preliminary data from the Cabinet Office showed Friday. The leading index that measures the future economic activity, rose to 104.7 in May from 104.2 in April. The score was forecast to rise to 104.6.

The material has been provided by InstaForex Company – www.instaforex.com

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