USD Broadly Higher on Upbeat NFP

07/08/2014 9:00 am EST

Focus: FOREX

After last week's surprisingly high labor report numbers, the staff at DailyForex.com reviews the US dollar's performance against other major currencies.

On Monday, financial markets were still basking in the afterglow of the unexpectedly robust labor report from the US Department of Labor, which was released last Thursday, even after a foreshortened workweek as the result of the Independence Day holiday. Analysts in Tokyo say that the jobs data confirmed that the US economic recovery remains strong and on track. Nonetheless, analysts don't believe that will change the Federal Reserve's direction-at least in regard to the current low interest rates-though quantitative easing is likely to continue to be reduced.

As a result, the US dollar strengthened and maintained positive momentum in Asia, with the US Dollar Index holding at 80.305 and DXY holding only a few pips away from Thursday's 1-week high of 80.315. DXY, while backing away from a 2-month trough that was struck last Tuesday. Investors use the Dollar Index DXY to measure the greenback's relative weight against several major currencies. The USD/JPY moved higher to 102.10 yen, remaining close to the Thursday's high of 102.27 yen in the wake of the jobs report; thus far, the US dollar has maintained nearly all of its 0.7% weekly gain.

Euro Feels Pressure from ECB Comments

The EUR/USD was down, trading at $1.35875 and analysts believe that it will remain under pressure and close to the recently struck 1-week trough after one ECB official reiterated the need for low interest rates over an extended period, even while pointing out the likelihood of a divergence in monetary policy between it and the UK and US as conditions improve and interest rates are hiked.

By the Staff at DailyForex.com

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