The U.S. dollar firmed up against its peers on Friday, after exhibiting some weakness in the European session.
The dollar’s weakness early on in the day was due to an unexpected drop in U.S. employment in December due to rising coronavirus cases and restrictions pausing recovering in the labor market.
Data from the Labor Department showed that non-farm payroll employment fell by 140,000 jobs in December after climbing by an upwardly revised 336,000 jobs in November.
The decline surprised economists, who had expected employment to increase by about 71,000 jobs compared to the addition of 245,000 jobs originally reported for the previous month.
The unemployment rate came in at 6.7% in December, unchanged from November. Economists had expected the unemployment rate to inch up to 6.8%.
The dollar index, which dropped to 89.66 earlier in the day, however rallied to 90.25 by mid afternoon before paring some gains. It was last seen at 90.08, up nearly 0.3% from previous close.
Against the Euro, the dollar firmed up to $1.2223, gaining nearly 0.4%. The euro area unemployment rate declined slightly in November, dropping to 8.3% from 8.4% a month earlier. The unemployment rate was 7.4% in November.
The Pound Sterling was slightly weak, fetching $1.3558 a unit, compared to $1.3564 Thursday evening.
The Yen weakened to 103.96 a dollar. Japan’s leading index rose to its highest level in nearly two years in November, preliminary data from the Cabinet Office showed. The leading index, which measures the future economic activity, grew to 96.6 in November from 94.3 in October.
Against the Aussie, the dollar was up marginally with the AUD-USD pair at 0.7760. Australia had a merchandise trade surplus of A$5.022 billion in November. That was shy of expectations for a surplus of A$6 billion and down from the downwardly revised A$6.583 billion in October (originally A$7.456 billion).
The Swiss franc was up slightly against the dollar, at CHF 0.8857. Switzerland’s jobless rate came in at a seasonally adjusted 3.4% in December, data from the State Secretariat for Economic Affairs, or SECO, showed. On an unadjusted basis, the unemployment rate rose to 3.5% in December from 3.3% in the previous month. Economists had forecast a rate of 3.4%.
The Loonie was weaker at 1.2701, after closing at 1.2691 on Thursday. Data released by Statistics Canada showed the Canadian economy shed about 63,000 jobs in December 2020, much larger than an expected drop of 27,500 jobs. In November, the economy had added 62,100 jobs. Employment dropped for the first time since April 2020.
While part-time jobs fell by about 99,000, full-time employment went up by less than expected 36,500 in December. The unemployment in December was up slightly at 8.6% compared to 8.5% in November.
The material has been provided by InstaForex Company – www.instaforex.com