Greenbacks continue to gain value against major currencies pair after an upbeat job data was released on February, 5, 2016. Even though there is still a lot of uncertainty in the financial market regarding the interest rates that is how interest rates will the FEDs increase this year. Since the raise in the interest rates directly results in strengthening the dollar against major currencies.
Furthermore, unemployment rate last year in the month of December was around 5.0% and it was also expected that the rate of unemployment will also remain unchanged in the month of January as well. However, after the announcement from the Labor Department showed that around one hundred and fifty one thousand new jobs were added in the month of January instead of anticipated 190,000 new jobs. This positive financial market news from the department led to increase in the value of dollar. The US unemployment rate decreased by 0.1% and it is currently at 4.9%.
In addition to, US economy job data also revealed that average hourly earnings also improved by 0.5% in the month of January. On the other hand, financial analysts were expecting this figure to be somewhere around 0.3% in January, after a steady reading in December.
William Dudley, President, New York Federal Reserve said on last Wednesday that strengthening of dollar can have an adverse an effect on the health of the United States economy as the global economy has a weak outlook. Moreover, after those remarks from the president of New York Federal Reserve led dollar to remain under pressure against other currencies.
Greenbacks compared to the Japanese Yen remained steady to trade at 116.81. However, dollar gained around 0.25% against the Euro. This was mainly due to the data that was released by the German company that revealed the orders fell by 0.7% in the month of December instead of expected 0.5%. EUR/USD pair traded at 1.1185 on Friday.
Meanwhile, British Pound and New Zealand Dollar also lost its ground by 0.4% and 0.33% against the greenback respectively, with GBP/USD pair traded at 1.4527 and NZD/USD at 0.6705. Furthermore, US dollar also gained 0.33% against Australian dollar, with AUD/USD at 0.7176. On the contrary, US dollar fell short against the Swiss Franc last week by almost 0.12% to trade at 0.9918.
US dollars counterpart that is the Canadian dollars remained unchanged last week in the financial market, and it continued to trade at 1.3745 last week. Furthermore, employment data released last week also stated that the unemployment rate had also increased to 7.2%, previously in the month of December unemployment rate was somewhere around 7.1%. Although it was expected that this reading would remain steady and unchanged.
US dollar index which shows the collective strength of Greenbacks against the six major currency pairs was up by 0.19% which further indicates the strengthening of US dollar. US dollar Index was at 96.68.
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