FOREX-Dollar ticks up after better-than-expected unemployment data

FOREX-Dollar ticks up after better-than-expected unemployment data

Reuters  | Jun 05, 2020 23:20

FOREX-Dollar ticks up after better-than-expected unemployment data

(New throughout; changes dateline, previous LONDON)
By Kate Duguid
NEW YORK, June 5 (Reuters) - The dollar was modestly higher
on Friday morning after payrolls data showed the U.S. labor
market unexpectedly improved in May, but the currency's gains
remained capped by continued uncertainty about the state of the
domestic economy.
The Labor Department's employment report on Friday showed
the jobless rate falling to 13.3% last month from 14.7% in
April, a post World War Two high. It followed on the heels of
surveys showing consumer confidence, manufacturing and services
industries stabilizing. Economic conditions have significantly
improved as businesses reopened after shuttering in mid-March to
slow the spread of COVID-19. The U.S. dollar index =USD rose following the payrolls
report, though in late morning trade had pared some of those
gains to last trade around 96.79, up 0.03%. The dollar was 0.24%
stronger against the euro EUR= , last up 0.20% to $1.131.
Against the safe-haven Japanese yen JPY= , the dollar was up
0.49% to 109.66 yen.
"Today you've seen better-than-expected economic data coming
out of the U.S. in terms of the jobs numbers," said Chuck Tomes,
portfolio manager at Manulife Asset Management.
"The reaction on the back of that has been expectations of
better growth coming out of the U.S. as well as a steepening
yield curve. Both of which have provided a lift to the dollar."
He noted, however, that the uncertainties about the economic
outlook and the possibilities of a second wave of infections had
capped the greenback's gains.
"When we look at the uncertainties surrounding the numbers
that probably warrants a somewhat range-bound environment for a
little bit of time."
The dollar's strengthening was also less visible against the
euro, and in the dollar index which heavily weights the euro,
after the single currency rose following the European Central
Bank's announcement Thursday that it was expanding its stimulus
program.
The euro remains on course for a weekly jump of just under
2%, its third straight weekly rise, although it may not log a
ninth consecutive day of gains, which would be its longest
rising streak since October 2004.

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