Forexpros – The dollar shot up against the major global currencies on Friday after the Bureau of Labor Statistics announced the world’s largest economy added a net 80,000 nonfarm payrolls in June, below market expectations for around 90,000 net jobs.
The unemployment rate remained unchanged at 8.2% in June.
In U.S. trading on Friday, EUR/USD was trading down 0.99% at 1.2268, a level that placed the dollar to a near two-year high against the euro.
April figures were revised to 68,000 from 77,000 nonfarm payrolls, while May’s numbers were revised to 77,000 from 69,000.
The news confirmed market sentiments that the U.S. economy continues limping along its road to recovery at best, which sent investors selling stocks and higher-yielding currencies and snapping up safe-haven dollar positions to ride out uncertainty.
Monetary policy decisions outside of the U.S. pushed the greenback up as well.
The European Central Bank cut its benchmark interest rate 25 basis points to 0.75%.
A Bank of England decision to inject GBP50 billion into the economy via stimulus measures followed by interest rate cuts in China pressured the dollar upwards as well.
Market talk that the Federal Reserve will stimulate the economy via quantitative easing failed to seriously cap the dollar’s gains.
Under quantitative easing, the Fed buys assets from banks, injecting the financial sector full of liquidity to push long-term interest rates down to foster investment and job creation, weakening the dollar in the process.
The dollar weakened against the yen, which is also a safe-haven currency.
Japanese indicators fueled demand for the yen as well.
In Japan, the Leading Indicators Index, a forward-looking composite index based on 12 economic indicators, jumped to 95.9 in May from 95.6 in April.
The figure outpaced market expectations for a 95.3 reading.
The greenback, meanwhile, was up against the pound, with GBP/USD trading down 0.36% at 1.5470.
The U.S. currency was down against the yen, with USD/JPY trading down 0.34% at 79.65, and up against the Swiss franc, with USD/CHF trading up 0.98% at 0.9789.
The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.30% at 1.0204, AUD/USD down 0.96% at 1.0188 and NZD/USD down 0.89% at 0.7964.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.76% at 83.57.
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