NFP report boosts dollar

May 5, 2017 09:50 AM

The USD appears to have been provided with a temporary boost following the news that the United States added another 211,000 jobs to its economy over the previous month, significantly above expectations of marginally below 190,000 with the U.S. employment rate falling to 4.4%. 

Although there is an impressive downside surprise with the unemployment rate, and this data does overall provide further confidence to expect another U.S. interest rate rise in June, I don’t necessarily expect the dollar to continue trending higher over the short term as the markets have already mostly priced in another interest rate hike from the Fed.  

All in all this NFP report represents a solid rebound from the previous jobs report and supports the indications that the Federal Reserve provided earlier in the week that the slowdown seen in U.S. economic data early in 2017 appears to be temporary. 

I would expect that investors will take further encouragement from this jobs report that the Federal Reserve will pull the trigger on another U.S. interest rate increase in June.

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