Euro, US dollar see gains on week

Story link: Euro, US dollar see gains on week

The US dollar made gains on Friday after new data made it look as if the Federal Reserve will not cut interest rates later in the year as many analysts have suspected they might. The Labor Department reported that 157,000 new jobs were created in May, more than had been anticipated. In addition, new numbers from the Institute for Supply Management showed that the manufacturing sector grew strongly in May, reinforcing numbers from the Chicago Purchasing Managers Index that were released earlier in the week.

The greenback was 0.2 percent higher versus sterling over the week, to $1.9791, while it gained 0.3 percent against both the yen and the Swiss franc, trading at ¥122.11 in relation to the yen and at SFr1.2305 against the franc.

New Eurozone data showed that retail sales were strong in Germany, indicating that the increase in the value added tax which was introduced in January only affected consumer spending in a limited way. Additionally, Eurozone unemployment hit a record low in May. These indications of a strong economy in the region led to speculation that the European Central Bank’s course of monetary tightening was not yet over. The shared currency added 0.1 percent against the yen and versus sterling as it traded at ¥163.90 against the yen and at £0.6787 in relation to sterling.

The Canadian dollar was strong as there were indications that the central bank in Canada will likely raise interest rates soon. By the end of the week, the Canadian currency had added 1.3 percent to C$1.0642 versus its US counterpart, its highest level against the greenback since July 1977.