EUR/USD, GBP/USD, AUD/USD, USD/JPY – U.S. Dollar Rallies After Non Farm Payrolls Report
- U.S. dollar gained strong upside momentum after the release of strong economic data.
- AUD/USD suffered a sell-off and moved towards the 0.6950 level.
- USD/JPY rallied towards the 131 level as Treasury yields moved higher.
U.S. dollar gained ground as traders reacted to the better-than-expected economic data.
The surprising Non Farm Payrolls report showed that economy added 517,000 jobs in January, compared to analyst consensus of 185,000. ISM Services PMI has also exceeded analyst expectations.
Treasury yields rallied as traders bet on a more hawkish Fed. In turn, higher Treasury yields provided support to the U.S. dollar.
EUR/USD moved lower as traders continued to take profits near multi-year highs. Today, EUR/USD traders had a chance to take a look at the Euro Area Services PMI report, which showed that Euro Area Services PMI improved from 49.8 in December to 50.8 in January, compared to analyst consensus of 50.7.
The report had minimal impact on currency dynamics as traders focused on the economic data from the U.S.
GBP/USD has also found itself under pressure in today’s trading session. The final reading of the UK Services PMI report showed that UK Services PMI declined from 49.9 in December to 48.7 in January, compared to analyst consensus of 48.
The economic data from the U.S. served as the main catalyst for GBP/USD today. If the Fed raises rates above the 5.00% level in 2023, GBP/USD will lose more ground.
USD/JPY rallied towards the 131 level as rising Treasury yields are bearish for the Japanese yen. It looks that strong U.S. data caught short sellers by surprise, and they rushed to close their short positions in USD/JPY.
For a look at all of today’s economic events, check out our economic calendar.