Nonfarm Payrolls Provide Pleasant Surprise to Dollar Bulls

Nonfarm payrolls pleasantly surprised dollar bulls as they demonstrated robust employment growth and added to speculations that the Federal Reserve will reduce monetary stimulus this month. Yet another surprise, this time not so pleasant, was the fact that the dollar did not manage to gain on the euro and the Great Britain pound, though it was able to jump versus the Japanese yen. Currently, though, it looks like the euro and the sterling are yielding to the greenback.

US nonfarm employment grew by 203,000 in November, compared to the analysts’ estimate of 180,000. What is more, the unemployment rate slipped from 7.3 percent to 7.0 percent. Market participants expected just a small drop to 7.2 percent.

Does this data mean that the Federal Reserve will taper stimulus in December? Not necessarily. Does it mean that traders will price in stimulus tapering? Most certainly.

EUR/USD fell from 1.3665 to 1..3649 and GBP/USD was down from 1.6334 to 1.6323 as of 13:53 GMT today. USD/JPY climbed from 101.78 to 102.84.

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