US Dollar tumbles to two-month low amid dismal non-farm payrolls data

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US Dollar tumbles to two-month low amid dismal non-farm payrolls data

On Friday, the American Dollar closed out the session sharply lower, tumbling to more than a two-month low, after US non-farm payrolls data for April had missed analyst’s expectation by a wider margin, putting a kibosh on hopes that a rapidly recovering US economy would prompt US Fed to hike rates and taper its monthly bond repurchase program.

In point of fact, in the day’s broader weakness in US Dollar was entirely prompted by a disappointing jobs growth data in April, as US Labour Department report released earlier in the day had unwrapped that US non-farm payrolls grew by only 266,000 jobs, far below an analysts’ estimate of an increase of 978,000 jobs.

Aside from that, Friday’s non-farm payrolls data had suggested that US Federal Reserve would keep its benchmark borrowing cost at an ultra-low level for an unforeseeable future, pouring fresh scorns on traders’ hopes that a rate hike in a near term would put the greenback on fire.

Besides, a lag in manufacturing activity in the United States coupled with a modest rise in exports and imports in China last month as cited by the country’s customs data, had weighed on US Dollar.

US Dollar dented after disappointing non-farm payrolls data

Citing statistics, in the day’s FX market closure, the American Dollar Index (DXY) measured against a basket of six major currencies on an average plunged 0.72 per cent to 90.17, the greenback’s lowest level since mid-February, while safe-haven Japanese Yen and Swiss Franc gained 0.45 per cent and 0.71 per cent respectively to 108.59 yen per Dollar and $0.9007 against their American counterparts.

On top of that, the bloc’s common currency euro, shared among 19 eurozone member states, soared 0.82 per cent to $1.2163, the strongest level since February 26, while British Pound surged 0.74 per cent to $1.3993 against its American peer.

Australian Dollar, in tandem, ascended 0.78 per cent to $0.7844 and New Zealand Dollar climbed 0.65 per cent to $0.7279 against the American currency, the highest level since March 3. On the week, the US Dollar Index (DXY) shrugged off 0.44 per cent.

Meanwhile, referring to a disdainful US non-farm payrolls data for April which appeared to have reformed FX traders’ mindsets across the globe, a senior market analyst at FX broker OANDA in New York, Edward Moya said, “This is only one report, but this is changing many traders' thinking on how this recovery is unfolding.