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Dollar Weakens as Employment Growth Misses Expectations

May 6, 2016 at 12:59 by Vladimir Vyun

Benjamin Franklin's portrait on a hundred-dollar billThe US dollar dropped against its major rivals after non-farm payrolls released today showed that employment growth was slower than markets had been counting on. Other parts of the report were not bad, helping to mitigate the impact of the negative indicator.

US employers added just 160,000 jobs in April while experts had predicted an increase by about 200,000 according to non-farm payrolls. Moreover, the previous month’s gain was revised down from 215,000 to 208,000. Earlier this week, Automatic Data Processing released its own employment report, which was basically in line with the government data (it is somewhat unusual as those two reports often have discrepancies).

The payrolls did not show only doom and gloom, though. The unemployment rate stayed low at 5%, and wage inflation picked up a little.

The dollar sank immediately after the release but is trying to steady itself now.

EUR/USD was up from the open of 1.1404 to the high of 1.1468 intraday but backed off to 1.1426 as of 12:54 GMT today. GBP/USD declined from 1.4484 to 1.4441 after reaching the high of 1.4541 earlier. USD/JPY dropped from 107.52 to 106.52.

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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