Stronger US Dollar Supported By Positive Non-Farm Payrolls Report

On Friday, June 7, 2013 we saw how the greenback appreciated against the EUR and the JPY.

The stronger USD was supported by the Nonfarm Payrolls number. The NFP number was better than what analysts had expected. Exactly at 8.30 ET the NFP number was released. The bullish number was good for the USD. Just after the release of the NFP number the EUR/USD went down. In the short term we saw that the EUR/USD went down and between 8.32 and 8.35 ET the EUR/USD just went up back again in the midterm due to the increased unemployment rate of 7.6%. But after 4 minutes at 8.35 ET the EUR/USD just went down again because analyst saw the increased NFP number as bullish for the economic recovery for the United States of America.

In the week of June 10-14, the euro zone will release official data on industrial production; this is a leading indicator of economic strength, so traders take this into consideration.

Exactly at 8.30 ET just after the release of the NFP number we saw that the USD/JPY shot up. But between 8.31 and 8.34 ET the USD/JPY went back down. The pair retraced in the midterm. But after 4 minutes at 8.35 ET the USD/JPY just went up again because analyst saw the increased NFP number as bullish for the economic recovery for the United States of America.

In the week of June 10-14, the Bank of Japan will announce its benchmark interest rate and release official data on manufacturing activity, an important indicator of economic health. So traders take this into consideration. If The BoJ will increase the frequency of bonds purchased than we could see the Nikkei Japan 225 index up, which would depreciate the Yen lower and stimulate the economy.

We have also seen this similar reaction of the market for the US Oil. There is a correlation between the USD and the commodity US Oil and Gold. The stronger USD leaded the price of Oil just after the release of the NFP number down. Oil prices went down due to the bullish NFP number. But at 9.30 ET the price of Oil moved upwards. The reason for this is the NFP number. Traders saw the NFP number as a good indicator for the economic recovery. If more jobs are added to the economy than consumer spending would increase and so the demand for more Oil will also increase. So this is why the price of Crude Oil shot up. The prices of Gold went down because of the stronger USD. Analyst saw the strong USD as a safe haven currency.EUR/USD" title="EUR/USD" width="1600" height="1200">USD/JPY" title="USD/JPY" width="1600" height="1200">