Following the release last Friday of an unexpectedly dismal jobs report from the US Department of Labor, the US Dollar had initially been under heavy pressure. However, today, in light trading on account of holidays in Asia and Europe, the US Dollar managed to stabilize versus both the Japanese Yen and the Euro. According to the report, the private sector added only 126,000 new jobs to the US economy last month, the smallest increase in 16 months and well off the consensus figure of some 245,000 added.
As a result, as reported at 7:00 (EDT) in New York, the EUR/USD was trading at $1.0986, a gain of nearly 0.6% but slipping from the session high of $1.1017. The USD/JPY was trading at 119.0985 Yen, closer to the top end of the trading band which ranged from 118.7950 Yen at the bottom to 119.1800 at the top.
Fed Rate Hike in Question
The concern over the disappointing jobs numbers is that it could compel the Federal Reserve Bank to, yet again, reconsider a rate hike which many thought might happen this summer. The Federal Reserve’s mandate is to ensure full employment and this report is likely to raise the uncertainty level as to the timing.