U.S. Dollar Recovers From Two-And-A-Half Year Low, Edges Higher
After falling to a two-and-a-half year low early in the day, the U.S. recovered over the course of trading on Friday.
The U.S. dollar index fell to a low 90.48 in morning trading but rebounded and is currently up 0.1 percent at 90.79.
The greenback is trading at 104.15 yen versus the 103.84 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.2120 compared to yesterday’s $1.2144.
The volatility on the day came as traders reacted to a report from the Labor Department showing much weaker than expected job growth in the month of November.
The Labor Department said non-farm payroll employment rose by 245,000 jobs in November after jumping by a downwardly revised 610,000 jobs in October.
Economists had expected employment to increase by 469,000 jobs compared to the addition of 638,000 jobs originally reported for the previous month.
Despite the weaker than expected job growth, the unemployment rate dipped to 6.7 percent in November from 6.9 percent in October. The unemployment rate was expected to edge down to 6.8 percent.
However, the bigger than expected drop in the unemployment rate came as a 400,000-person decline in the labor force far outpaced the 74,000-person drop in the household measure of employment.
“The latter is not too much of a concern given it follows a 2.3 million gain in October, but the drop in the labor force, which is now 4 million below its pre-pandemic level, is a worrying sign that the unemployed are giving up looking for work,” said Michael Pearce, U.S. Senior Economist at Capital Economics.
While the data reflects the economic impact of the recent spike in coronavirus cases, traders seem optimistic the report will spur lawmakers in Washington to finally pass a new fiscal stimulus bill.
In a post on Twitter, Senate Minority Leader Chuck Schumer, D-N.Y., said the jobs data “shows the need for strong, urgent emergency relief is more important than ever.”
House Speaker Nancy Pelosi, D-Calif., also claimed that the weaker than expected job growth has created “momentum” toward a stimulus deal.
Democratic and Republican leaders have resumed negotiations over a new stimulus bill, although it remains to be seen if they can reach an agreement after months of stagnation.
In other economic news, a report released by the Commerce Department showed the U.S. trade deficit widened in the month of October.
The report said the trade deficit widened to $63.1 billion in October from a revised $62.1 billion in September. Economists had expected the deficit to widen to $64.8 billion from the $63.9 billion originally reported for the previous month.
The Commerce Department also released a separate report showing new orders for U.S. manufactured goods increased for the sixth consecutive month in October.
The material has been provided by InstaForex Company – www.instaforex.com