Upbeat US jobs data drive Dollar rally, wiping out Euro’s weekly gains

Stronger-than-forecast US jobs figures lift the US Dollar, wiping out EUR/USD's weekly advance.
165K US Nonfarm Payrolls added in October, far exceeding the 65K forecast.
The Euro faces further selling pressure from weak Eurozone Retail Sales and cautious ECB remarks.

1.1132 is the level at which EUR/USD trades around at the time of writing. The pair is down 0.77% on Friday, with its entire weekly advance wiped out as better-than-forecast US Nonfarm Payrolls (NFP) figures strengthen demand for the US Dollar (USD).

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

October brought 165K new jobs to the US economy, more than twice the projected 65K. September's gain was also revised upwards, from 29K to 60K. Meanwhile, the Unemployment Rate declined from 4.2% to 4.1%.

Pay growth exceeded expectations too, with Average Hourly Earnings increasing 0.4% MoM against a 0.3% forecast. Although annual wage growth moderated from 3.2% to 3.1%, it remained above the expected 2.9%.

At around 102.33, the US Dollar Index (DXY) is 0.73% higher on the day. The index measures the Greenback against a basket of six major currencies.

Labour-market resilience is evident in the data, consistent with the assessment of most Fed officials. With the Fed committed to returning inflation to its 2% target, a further interest rate rise in December remains a possibility. Risks to inflation are still skewed upwards, notably through higher energy costs associated with the Middle East conflict.

The Euro also faces pressure from Eurozone Retail Sales that undershot expectations. After a 2% fall in August, sales dropped 0.7% MoM in September, against a forecast decline of 0.1%. Annual growth eased from 1.3% to 0.4%, missing the 0.6% projection.

Despite continued caution among policymakers, traders anticipate another interest rate increase from the European Central Bank (ECB) in December. Speaking on Friday, Chief Economist Philip Lane said inflation must return to target within a year or two, adding that financial conditions had already tightened. Echoing Thursday's comments from ECB President Christine Lagarde, Lane said: “Let’s gather information between now and December and let’s see what we do in December,”

US Dollar: Today's Currency Performance

Against the major currencies listed below, the US Dollar (USD) recorded its largest gain today versus the New Zealand Dollar. The table presents its percentage moves against each currency.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.77%	0.79%	0.40%	0.80%	1.12%	1.20%	0.54%
EUR	-0.77%		0.03%	-0.37%	0.04%	0.35%	0.43%	-0.23%
GBP	-0.79%	-0.03%		-0.38%	0.01%	0.33%	0.41%	-0.25%
JPY	-0.40%	0.37%	0.38%		0.41%	0.73%	0.80%	0.15%
CAD	-0.80%	-0.04%	-0.01%	-0.41%		0.31%	0.39%	-0.27%
AUD	-1.12%	-0.35%	-0.33%	-0.73%	-0.31%		0.08%	-0.58%
NZD	-1.20%	-0.43%	-0.41%	-0.80%	-0.39%	-0.08%		-0.64%
CHF	-0.54%	0.23%	0.25%	-0.15%	0.27%	0.58%	0.64%

Percentage movements between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read USD (base)/JPY (quote), for instance, choose the US Dollar on the left and follow that row across to the Japanese Yen. The intersecting cell gives the pair's percentage change.