Exchange Rates Update: USD Strengthens Against EUR & JPY as US Job Figures Show Surprising Strength

Modified: Friday, 3 May 2013 19:35 BST - Written by Frank Davies

STORY LINK Exchange Rates Update: USD Strengthens Against EUR & JPY as US Job Figures Show Surprising Strength

The US Dollar rose against the Euro and Japanese Yen after employment rose more than expected in April and hiring was far stronger than economists had been expecting. The data eased worries that the sequestration budget cuts are having a big impact on the world’s largest economy.

According to the US Labour Department, Nonfarm payrolls jumped by 165,000 in April causing the unemployment rate to drop to a four-year low of 7.5%. Payrolls increased by 138,000 jobs in March, 50,000 more than previously reported, with job growth for February was revised up by 64,000 to 332,000 the largest gain since May 2010. Economists had been expecting payrolls to rise by 145,000 and for the unemployment rate to hold steady at 7.6%.

Despite the data showing an improving picture for the US economy some aspects of the data showed a consistency with economic activity as Construction employment fell for the first time since May, while manufacturing payrolls were flat.

The last time the US unemployment rate was at 7.5 per cent was at the close of 2008.

Although some industry experts expect the labour market recovery to ease in the months ahead, due to the ongoing cuts and reduced levels of consumer spending, in the aftermath of the report’s publication the US Dollar was able to surge against its rivals, strengthening to 99.05 Yen and 1.3043 Euros.

The ‘Greenback’ also gained on the Pound, despite the British currency gaining on its US counterpart following a better-than-expected UK service sector index.

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