Today’s release of the October labor department’s non-farm payrolls increase of 214,000 jobs and a drop from 5.9% to 5.8% in the unemployment rate is another solid showing for the US economy. Although the market was looking for a number closer to 234,000 (Bloomberg consensus), the monthly running average above 200,000 for the year is what economists will highlight. Consistent growth in the employment picture will continue to provide the backdrop for a strong dollar and should embolden US dollar bulls to add to their current medium-term positions. Short-term traders on the other hand will be more cautious on a Friday session to book profits before the weekend.
Friday’s release of the September labor departments non-farm payrolls increase of 248,000 and a drop from 6.1% to 5.9% in the unemployment rate will certainly put the wind back in the sails of US dollar bulls. Strength in the labor market will provide the FED with the confidence to guide US interest rate expectations higher as well as sooner, while the ECB and BOJ ease conditions on their struggling economies. Dollar strength in developed markets, known as G10 currencies, is broad based and gaining momentum as a result.