After Strong NFP Report, Dollar Strengthens and 10-Year Yields Surge to 1.6

After Strong NFP Report, Dollar Strengthens and 10-Year Yields Surge to 1.6

The dollar continued to rise early in the US session following the release of a much stronger-than-expected nonfarm payroll report. The yield on the 10-year bond also rose sharply and is now over 1.6 again. The dollar is currently the second strongest in a week, behind only the oil-backed Canadian dollar. Although the Swiss franc and the yen are trying to recover against other currencies, in particular against commodity currencies, both of them still post the worst results in a week.

The number of people employed in the non-agricultural sector of the United States in February rose by 379 thousand, well above expectations of 148 thousand. The previous month’s figure was also sharply revised from 49 thousand to 166 thousand. Overall, total non-farm employment continued to decline by -9.5 million, or -6.2%, compared to the pre-pandemic level in February 2020.

The unemployment rate fell to 6.2% from 6.3%, better than expected at 6.4%. average hourly earnings rose 0.2% MoM, in line with expectations. The labor force participation rate remained at 61.4%. The US trade deficit widened to -68.2 billion US dollars in January against expectations of -67.5 billion US dollars. Canada’s trade surplus was C $ 1.4 billion against expectations of C $ 1.4 billion.
US Dollar Index (DXY) Hits 2021 High, Rises Past 92.00
The index remained at 92.00 on Friday after the US nonfarm employment index largely beat forecasts in February. The economy added 379,000 jobs and increased the previous print volume to 166,000.

After the First Reaction, the US Dollar Index (DXY) jumped to its highest level since late November at 92.14. At the time of writing, the DXY is up 0.5% on the day to 92.10. The dollar’s march northward remains unchanged and is trading at new 2021 highs above the 92.00 barriers tracked by the United States Dollar Index (DXY).

The dollar’s push above 92.00 was also helped by the yield on the 10-year US benchmark, which briefly tested levels above the 1.60% benchmark for the first time since February 2020. The dollar continues to outperform its peers following the report and the US dollar. The index was last up during the day at 92.00.

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Author : Azeez Mustapha


Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.