Strong Job Data Helps USD Observe Strong Gains Versus Other Fiats

Recently, the performance recorded for the USD was stronger versus other fiat currencies in the foreign exchange market.

USD Recorded Biggest Daily Performance

The gains of the USD versus other fiat currencies are the strongest since mid-June, especially against the Japanese yen.

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It was the biggest daily percentage that was recorded in the price of the USD against the yen.

The rise was due to the payrolls report for the United States that showed stronger-than-expected results.

Apart from posting the payroll data, it was suggested that the interest rates may also be increased. It was made clear that the increase would be aggressive in order to fight inflation.

The USD Index

The USD Index tends to gauge the performance of the dollar versus the bucket of major fiat currencies. The index showed that the USD had recorded broader gains versus all of the bucket currencies.

The rise was due to the nonfarm payroll data. The data showed that in the month of July, the jobs they had estimated were 228,000.

It came as a huge surprise that the payrolls increased tremendously and were extremely higher than the estimations. The recorded data for the payrolls for the month of July was 528,000 jobs.

This was even more than double what had been estimated in the first place for the month of July.

The data also suggested that the payroll figure was even stronger than the payroll data recorded in the month of February.

Even the economists were very excited to see the Nonfarm Payrolls results for the month of July.

USD Index Performance

The report suggests that right after the Friday trading, the USD Index was visibly stronger versus the bucket fiat currencies.

It reportedly grew by 0.8% on the particular trading day and its score versus the currencies stood at 106.57.

Even before the employment data was shared on Friday, the USD index was up 0.2%. However, the index gained 0.6% growth right after the employment data was shared.

This meant that it was due to the employment data the value of the USD rose against the major fiat currencies.

Merk Investment’s Remarks on the Employment Results

According to Axel Merk from Merk Investment, the employment results were a huge surprise for every economist.

With the results that have been shared surrounding employment, the Feds will not be able to pivot the interest rates.

Considering the recent hikes in the employment rates, the Feds will need to continue increasing the interest rates to deal with the inflation rates.

The folks who wanted the hikes to take place at a slower rate have been pushed aside by the recent employment data witnessed by the entire world.

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