American Dollar rallies to clock the largest intra-session gain in three weeks

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American Dollar rallies to clock the largest intra-session gain in three weeks

On Friday, the US Dollar Index (DXY) measured against a basket of six major currencies on an average, had reported its largest intra-session gain in more than three weeks, as a strong US nonfarm payrolls report released earlier in the day had driven Treasury bond yields higher while stoking possibilities of a tapering of fiscal support for the economy.

In point of fact, earlier in the day, the US Labour Department’s closely observed US nonfarm payrolls data had revealed that US employers had added 943,000 jobs in July and data for May and June were revised higher, as US unemployment rate fell to a 16-month low of 5.4 per cent from a 5.9 per cent in June, building up a solid case for the US Federal Reserve to ease off its $120 billion monthly bond repurchase program.

On top of that, a stronger-than-anticipated growth in US nonfarm payrolls came forth a day after the US Fed’s Kaplan was quoted saying that the US Central Bank should begin to ease fiscal support for the economy as quickly as possible, echoing earlier remarks from the US Treasury Secretary Janet Yellen, galvanizing a Dollar-buying spree.

US Dollar gains after US nonfarm payrolls beat estimate

Citing statistics, in the day’s FX market round off, the US Dollar Index (DXY) gained 0.56 per cent to 92.74, hitting its highest level in roughly three weeks, while the bloc’s common currency Euro, shared among 19 euro zone member states, took a tattering header of 0.62 per cent to wrap up the day at $1.1760 against its American counterpart.

Besides, the British Pound shed 0.38 per cent to $1.3876, while the Aussies lost 0.71 per cent to $0.7351 and the kiwis dropped 0.62 per cent to $0.7010 against the greenback. On top of that, the safe-haven Japanese yen had shrugged off 0.40 per cent to 110.21 yen per Dollar, while Swiss Franc was slumped as much as 0.90 per cent against its American peer to $0.9149.

On the week, the US Dollar Index (DXY) gained 0.67 per cent. US 10-year Treasury bond notes were last trading at 1.29 per cent on late-afternoon US session. Meanwhile, adding that further upswings in US Dollar might be highly unlikely until any major policy changes from the US Federal Reserve, a senior analyst at fxstreet, Joseph Trevisani said, “The Fed is pumping far more money into the U.S. economy and, by diffusion, to the rest of the world than anybody else”.