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US dollar breaks out as payrolls surge

H.S. Borji
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US dollar breaks out as payrolls surge

The US dollar was stronger Friday amid signs the US labour market was heating up at the start of the second quarter.

The US dollar index, a broad measure of the US dollar’s performance against six major peers, rose 0.4 percent to 79.84.

US employers added 288,000 nonfarm payrolls in April, following an upwardly revised gain of 203,000 the previous month, the Labor Department reported today in Washington. A median estimate of economists polled by Bloomberg called for a gain of 210,000. The monthly advance was the fastest in more than two years, a sign the labour market was regaining momentum after the weather-induced slowdown.

The unemployment rate plunged from 6.7 percent to 6.3 percent, as more workers exited the labour force. The labour force participation rate fell 0. 4 percentage point to 62.8 percent.

Average hourly earnings were unchanged in April, official data showed. Year-on-year, earnings rose 1.9 percent.

The greenback surged across the board. Europe’s common currency shed 0.4 percent, sending the EURUSD pair to 1.3819. The pair is likely to find support at 1.3797. Initial resistance is likely found at 1.3893.

The British pound declined 0.3 percent versus the US dollar, ending four consecutive days of advances that sent the GBPUSD pair to fresh five year highs. The daily chart shows initial support at 1.6797. On the upside, the first resistance is likely found at 1.6935.

The USDCAD climbed 0.2 percent, consolidating at 1.0985 after briefly overcoming the 1.10 handle.

Nonfarm payrolls also propelled the USD/JPY, which surged more than 0.4 percent to 102.7850.

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