Today’s surprising payrolls report out of the United States is fueling speculation that the Federal Reserve could begin its taper as early as December. The latest report shows a surge in jobs, and that is leading some to believe that the easing policy will be lifted, which is very dollar positive.
While the eurozone and the United Kingdom are both showing improvements in their economies, both are still firmly in need of looser monetary policy. The United States, though, appears on the verge of tightening — and that is helping the US dollar quite a bit, pushing it higher against most of its major counterparts.
Even though the unemployment rate ticked higher in October, from 7.2 per cent to 7.3 per cent, that hasn’t caused much alarm since all of the workers affected by the government shutdown would have been included in that number. What’s really catching attention is the fact that the US economy added 204,000 jobs in October, and that September and August were revised upward by 60,000 (combined).
The news has many speculating that the Federal Reserve will approve “Dectaper,” the name given to the idea of a reduction in asset purchases in December.
At 14:42 GMT EUR/USD is down to 1.3357 from the open at 1.3418. GBP/USD is down to 1.6004 from the open at 1.6078. USD/JPY is up to 98.9035 from the open at 98.0300.
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