Upbeat U.S. Jobs Data Buoys Dollar

Upbeat U.S. Jobs Data Buoys Dollar

The U.S. dollar strengthened against its key counterparts in the European session on Friday, following the release of a data showing better than expected job growth in August, which bolsters hopes for a quarter point rate hike as early as next month.

Data from the Labor Department showed that the non-farm payroll employment surged up by 201,000 jobs in August after climbing by a downwardly revised 147,000 jobs in July.

Economists had expected employment to increase by about 191,000 jobs compared to the addition of 157,000 jobs originally reported for the previous month.

Despite the stronger than expected job growth during the month, the unemployment rate held at 3.9 percent in August compared to expectations for a drop to 3.8 percent.

As a public comment period on new U.S. tariffs on $200 billion worth of Chinese goods has expired, traders focus on news regarding the implementation of the proposed tariffs by President Donald Trump and his administration.

Adding to the worries about, Trump reportedly told a columnist for the Wall Street Journal he is «still bothered by the terms of U.S. trade with Japan.»

The currency traded mixed against its major counterparts in the Asian session. While the currency fell against the yen and the euro, it held steady against the pound and the franc.

The greenback appreciated to a 2-day high of 0.6550 against the kiwi, after falling to 0.6594 at 5:45 pm ET. Next key resistance for the greenback is seen around the 0.64 region.

Following near a 5-month low of 0.9642 hit at 2:45 am ET, the greenback reversed direction and bounced off to 0.9685 against the franc. Further uptrend may take the greenback to a resistance around the 0.99 level.

The greenback added 0.7 percent to hit a 2-day high of 1.1562 against the euro, from a low of 1.1649 hit at 3:00 am ET. The greenback is seen finding resistance around the 1.13 mark.

Data from Destatis showed that Germany's exports declined for the first time in three months in July, while imports grew at a faster pace.

Exports fell unexpectedly 0.9 percent on month in July, reversing June's 0.1 percent rise. This was the first fall in three months. Shipments were expected to climb 0.3 percent.

Having dropped to more than a 2-week low of 110.38 against the yen at 8:00 pm ET, the greenback changed its course and was trading higher at 110.99. The greenback may possibly challenge resistance around the 113.00 level.

Data from the Ministry of Internal Affairs and Communications showed that Japan household spending rose 0.1 percent on year in July, coming in at 283,387 yen.

That beat expectations for a decline of 0.9 percent following the 1.2 percent drop in June.

The greenback was 1.0 percent higher at 0.7125 against the aussie, a 2-1/2-year high. The pair was valued at 0.7195 when it closed deals on Thursday. The greenback is likely to test resistance around the 0.70 level, if it continues its rally.

Bouncing off from a 3-day low of 1.3110 seen at 8:15 am ET, the greenback climbed to 1.3182 against the loonie. The greenback finished yesterday's trading at 1.3141 against the loonie. The next possible resistance for the greenback is seen around the 1.33 level.

The greenback regained some of its lost ground against the pound with the pair trading at 1.2956. This follows a weekly low of 1.3028 touched at 6:45 am ET. On the upside, 1.27 is possibly seen as the next resistance for the greenback.

Data from the Lloyds bank subsidiary Halifax and IHS Markit showed that UK house prices rose at a marginal pace in August.

House prices gained 0.1 percent month-on-month in August, slower than July's 1.2 percent increase.

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