- US Dollar Index leaps to 2-week highs above 97.40.
- Nonfarm payrolls in the U.S. increased more than expected in June.
- USD/CHF remains on track to post gains for the second straight week.
The USD/CHF pair spent the first half of the day moving sideways below 0.99 but gained traction in the American trading hours to climb to its highest level since June 19 at 0.9932. As of writing, the pair was up 80 pips on the day at 0.9930. With this recent upsurge, the pair remains on track to post weekly gains for the second straight week.
The US Dollar Index, which stayed in a consolidation phase following Monday’s sharp upsurge, extended its rally on Friday after the monthly employment report from the U.S. showed a much bigger increase in nonfarm payroll employment than expected. After the U.S. Bureau of Labor Statistics said that the NFP rose 224,000 in June, the DXY erased all the losses it suffered in the last two weeks and rose to 97.44. At the moment, the index is up 0.62% on the day at 97.32.
Commenting on the data, “Zooming out to the longer term, the chances of a full cycle of monetary easing are also in doubt. The world’s most powerful central bank has two mandates: full employment and price stability. As long as average employment remains robust, it is hard to see the Fed embarking on a long series of rate cuts,” said FXStreet analyst Yohay Elam.
Additionally, despite the stock markets’ negative reaction to this data, the 10-year Treasury bond yield added more than 5% to show that markets are not expecting the Fed to make multiple rate cuts in the remainder of the year as initially expected following Chairman Powell’s comments after the June meeting.
Technical levels to watch for
Share
