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Dollar Bounces After Dropping on NFP

September 2, 2016 at 16:51 by Vladimir Vyun

The all-seeing eye on top of pyramid on one-dollar billThe US dollar recovered from earlier losses that followed disappointing non-farm payrolls. The bounce was a result of persisting speculations about the possibility of an interest rate hike this year.

For whole week, traders were waiting for US employment data, thinking that NFP would support the case of monetary tightening. Yet the actual report proved to be disappointing as all important parts missed expectations. Unsurprisingly, that hurt the dollar.

What was surprising is the speed with which the US currency was able to recover. Analysts speculated that the reason for the quick rebound were persisting speculations about an incoming rate hike. While chances for a hike in September do not look high, a December lift-off is still in the cards, and that is fueling the dollar’s strength.

EUR/USD fell from the opening of 1.1196 to 1.1160 as of 16:43 GMT today after rallying to the high of 1.1251 intraday. GBP/USD rose from 1.3266 to 1.3308 but retreated from 1.3352 — the highest level in a month. USD/JPY advanced from 103.23 to 103.95 and was trading at the strongest rate since July 29.

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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