U.S. Dollar Surges after Data Shows More Workers Got Jobs in May

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U.S. Dollar Surges after Data Shows More Workers Got Jobs in MayThe U.S. dollar advanced versus the euro after data showed that U.S. employers absorbed more workers in May, indicating that the economy is growing stronger.

The dollar rose 0.2 percent to $1.3632 per euro in midmorning trading in New York after earlier rising to its strongest level since February on Thursday. The greenback also advanced 0.2 percent to 102.57 per yen. The yen surged 0.1 percent to 139.82 for a euro.

The U.S. nonfarm payrolls grew by 217,000 last month. While this was less than April’s reading of 282,000, it was more than 215,000 expected by economists surveyed by Bloomberg. The jobless rate stood at 6.3 percent.

The euro declined against its major counterparts following the introduction of stimulus measures by the European Central Bank on Thursday. Yesterday, the euro grew at the fastest pace against the dollar after the ECB rolled out a first by charging fees on deposits, along with other measures aimed at combating disinflation and weak economic growth.

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“The ECB measures could boost risk appetite and demand for carry,” Valentin Marinov, a London-based head of European Group of 10 currency strategy at Citigroup told Bloomberg. “Negative deposit rates will force banks to spend their excess cash. Presumably part of that will go into risk-correlated, higher yielding assets like stocks or high-yielding currencies.”

Today’s jobs report in the U.S. indicates that the economy is gradually strengthening after posting a 1 percent decline in the first quarter due to the extreme winter weather.

Another report released on Thursday by the U.S. Labor Department revealed that the number of Americans who filed for unemployment benefits declined to a seven-year low over the past one month. The number of jobless claims stood at 310,250 in the month ended May 31. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com