The dollar is turning in a mixed performance Friday afternoon, following the release of the stronger than expected February jobs report this morning. The U.S. currency is down against its major European rivals, but is modestly higher against the Japanese Yen.
The strong employment data has eased concerns among investors that the U.S. economy was heading for recession. The data also has investors of the mindset that further interest rate hikes by the Federal Reserve could come sooner, rather than later.
Employment in the U.S. increased by much more than expected in the month of February, according to a report released by the Labor Department on Friday, although the report also showed a modest drop in employee wages.
The report said total non-farm employment jumped by 242,000 jobs in February compared to economist estimates for an increase of about 190,000 jobs.
Job growth in December and January was also upwardly revised to 271,000 and 172,000, respectively, reflecting a net upward revision of 30,000 jobs.
The unemployment rate was subsequently unchanged from the previous month at 4.9 percent, holding at its lowest level since February of 2008. The unchanged reading on unemployment matched estimates.
Partly reflecting a notable decrease in the value of exports, the Commerce Department released a report on Friday showing that the U.S. trade deficit widened in the month of January. The Commerce Department said the trade deficit widened to $45.7 billion in January from a revised $44.7 billion in December.
Economists had expected the deficit to edge up to $43.9 billion from the $43.4 billion originally reported for the previous month.
Investors are looking forward to next week’s European Central Bank meeting, where further stimulus measures are expected to be announced.
The dollar fell to a 1-week low of $1.1043 against the Euro Friday morning, but has since bounced back to around $1.0995.
Germany’s construction sector expanded at the fastest pace in nearly five years in February on housing activity, survey data from Markit Economics showed Friday. The construction Purchasing Managers’ Index rose to 59.6 in February. The pace of expansion accelerated to the most marked since March 2011.
Italy’s economic growth slowed as initially estimated in the three months ended December, latest figures from the statistical office Istat showed Friday. Gross domestic product rose 0.1 percent quarter-on-quarter in the fourth quarter, confirming the flash data, slower than the 0.2 percent hike in the previous quarter.
The buck dropped to a week and a half low of $1.4248 against the pound sterling Friday, but has since inched back to around $1.4215.
The Bank of Japan is not considering lowering interest rates further, Governor Haruhiko Kuroda said Friday.
The BoJ will continue to scrutinize risks and would not hesitate to adjust policy if necessary, he told parliament.
Further, Kuroda said the bank will use three dimensions of quantitative and qualitative easing and negative interest rates to achieve its inflation target.
The greenback dropped to a low of Y113.074 against the Japanese Yen following the release of the jobs report, but has since rebounded to around Y114.125.
The material has been provided by InstaForex Company – www.instaforex.com