On Thursday, the American currency had sharply clawed back from a three-week low following reveal of a better-than-anticipated US job data, while US Labour Department data pointing towards a further strengthening of labour market, had rekindled a beacon of hope that the world’s largest economy had been well en-route to rebound from a pandemic-induced slump.
In point of fact, in the day’s meteoric rise in American currency, was almost entirely prompted by a restoration of safe-haven bid of the greenback, while spot gold futures, widely viewed as a hedge against a higher inflation, faltered well below a support-helve of $1,900 an ounce, as investors’ whispers of a potential shift in US Fed’s policy stance grew louder.
According to the ADP National Employment report released earlier in the day, US private employers had created 978,000 jobs in May, the largest gain in nine months, while US Labour Department’s weekly jobless claims data had unfurled that the number of Americans filing for first-time state unemployment benefits dropped below a 400,000 level for the first time since mid-March, eventually adding to investors’ optimism that a rapidly recovering US economy might witness a rate-hike in near term outlook.
On top of that, Dallas Fed Chair Robert Kaplan was quoted saying following reveal of a raft of upbeat economic data earlier in the day that the US Fed should begin talks to taper off support for the economy, which in effect bode well for both US Treasury bond notes alongside the greenback.
US Dollar soars after upbeat job data
Citing statistics, in the day’s FX market closure, the US Dollar Index (DXY) measured against a basket of six major currencies on an average, rose 0.7 per cent to 90.50 after hitting a three-week high of 90.55 earlier in the session, while the bloc’s common currency euro shared among 19 eurozone member states, slid 0.7 per cent to a three-week low of $1.2118.
Aside from that, against the safe-haven Japanese Yen, the greenback gained 0.6 per cent to wrap up the day at $1.2118. Meanwhile, referring to a US economy which has been showing strong signs of a rapid recovery, a FX Strategist and trader at Tempus Inc in Washington, Juan Perez said, “You have to give the U.S.
dollar merit because the economy behind it seems to be coming out of the pandemic mode and now indicators are giving us signs of clear momentum. ”