The dollar is gaining ground against all of its major competitors on Friday, after the stronger than expected January employment report. The only disappointing aspect of the jobs report was the unexpected increase in the unemployment rate, which was caused by an increase in the workforce.
Employment in the U.S. increased by more than anticipated in the month of January, according to a report released by the Labor Department on Friday, although the report also showed an unexpected uptick by the unemployment rate.
The Labor Department said non-farm payroll employment rose by 257,000 jobs in January compared to economist estimates for an increase about 230,000 jobs.
Revised data also showed that employment in November and December jumped by 423,000 jobs and 329,000 jobs, respectively, reflecting a net upward revision of 147,000.
Nonetheless, the report also showed that the unemployment rate edged up to 5.7 percent in January from 5.6 percent in December.
The unemployment rate had been expected to remain unchanged from the previous month, when it was at its lowest level since a matching rate in June of 2008.
The unexpected uptick by the unemployment rate reflected a substantial increase by the size of the labor force, which surged up by 1.05 million people.
Additionally, the Labor Department said average hourly employee earnings increased by $0.12 to $24.75 in January after falling by $0.05 to $24.63 in December.
The annual rate of average hourly earnings growth subsequently accelerated to 2.2 percent in January from a two-year low of 1.7 percent in December.
The Federal Reserve should “look through” the “temporary” trend of low inflation and raise interest rates sooner than later, according to Charles Plosser, the president of the Philadelphia Fed.
Fears about a stronger dollar and low inflation should not overshadow above-trend growth in the overall U.S. economy, Plosser told CNBC Friday morning.
The dollar has climbed to a 2-day high of $1.1312 against the Euro Friday, from yesterday’s low of around $1.1500.
Germany’s industrial production expanded for the fourth consecutive month in December, but the growth rate weakened, defying expectations for a faster expansion, as mild weather dampened construction activity.
Industrial output edged up 0.1 percent in December from a month ago, Destatis said Friday. Production was forecast to rise 0.4 percent after expanding by a revised 0.1 percent in November.
The French trade deficit increased more than expected in December due to an increase in imports, the customs office reported Friday. The trade gap widened to EUR 3.44 billion in December from EUR 3.09 billion in November. The deficit was forecast to rise to EUR 3.3 billion.
The buck has also risen to $1.5215 against the pound sterling this afternoon, after hovering around the $1.5330 level this morning.
The U.K. trade deficit widened to the highest in four years in 2014 as exports declined sharply than imports, official data revealed Friday. The visible trade gap rose to GBP 10.2 billion in December from GBP 9.28 billion in November. Economists expected a GBP 9.1 billion deficit.
The greenback has surged to nearly a 1-month high of Y119.170 against the Japanese Yen this afternoon, from around Y117.300 this morning.
The leading index for Japan, which measures the future economic activity, increased less than expected in December, after falling in the previous month, preliminary figures from the Cabinet Office showed Friday. The leading index climbed to 105.2 in December from 103.7 in November. Economists had expect the index to rise to 105.4.
Japan’s official reserve assets increased over the previous month in January, a report published by the Ministry of Finance revealed Friday. Total reserve assets increased by $555 million month-on-month to $1,261.103 billion in January.
The material has been provided by InstaForex Company – www.instaforex.com