The dollar is rising sharply against all of its major competitors at the end of the trading week, after the U.S. jobs report for October showed a larger than expected increase in employment growth. Coupled with the strong GDP data from Thursday, investors have begun to speculate that the Federal Reserve may be forced to reduce its stimulus measures sooner than previously thought.
Employment in the U.S. increased by much more than expected in the month of October, according to a report released by the Labor Department on Friday, with the strong job growth coming despite the government shutdown.
The report said non-farm payroll employment jumped by 204,000 jobs in October compared to economist estimates for an increase of just 120,000 jobs.
Despite the stronger than expected job growth, the unemployment rate ticked up to 7.3 percent in October from 7.2 percent in September. The modest increase by the unemployment rate, which matched economist estimates, largely reflected the way furloughed federal workers were counted in the household survey.
With personal income once again rising at a faster rate than personal spending, the Commerce Department released a report on Friday showing that the U.S. savings rate reached a nine-month high in September.
The report showed that personal income increased by 0.5 percent in September, matching the increase seen in August. Economists had been expecting income to rise by about 0.3 percent.
Meanwhile, the Commerce Department said personal spending edged up by 0.2 percent in September after rising by 0.3 percent in August. The modest increase matched economist estimates.
Consumer sentiment in the U.S. has unexpectedly deteriorated in the month of November, according to a report released by Thomson Reuters and the University of Michigan on Friday, with sentiment falling to its lowest level in nearly two years.
The report said the preliminary reading on the consumer sentiment index for November came in at 72.0 compared to October’s final reading of 73.2. The decrease came as a surprise to economists, who had been expecting the consumer sentiment index to climb to a reading of 74.5.
Standard and Poor’s on Friday slashed France’s sovereign credit ratings by one notch, saying that the government’s economic policies have failed to improve the country’s growth prospects, which in turn, reduces the room for sound fiscal reforms.
S&P said it is lowering the unsolicited long-term foreign and local currency sovereign credit ratings on the Republic of France to ‘AA’ from ‘AA+’. The outlook is stable. The short-term ratings, at the same time, were affirmed at ‘A-1+’.
The dollar dipped to an early low of $1.3437 against the Euro on Friday, but has since risen to around $1.3345.
Germany’s export grew at its fastest pace this year, while an unexpected decline in goods intake lifted the nation’s trade surplus in September.
Exports advanced 1.7 percent month-on-month, which was the fastest increase this year and well above the expected 0.6 percent growth. The increase follows the 1 percent rise in August, data published by Destatis showed Friday.
Meanwhile, imports dropped 1.9 percent, confounding expectations for a 0.4 percent rise and reversing the 0.1 percent gain in August and the 0.2 percent growth in July.
Germany’s manufacturing turnover dropped 0.8 percent in September as both domestic and foreign turnover declined from August, Destatis reported Friday. The decline reversed prior month’s 2.4 percent rise.
France’s industrial production decreased for the third successive month in September, but to a lesser extent than in the previous month, data released by statistical office Insee showed Friday. Industrial production decreased 0.9 percent year-on-year in September, in line with economists’ forecast. The rate of fall was slower than the 2 percent contraction seen in August.
French trade deficit widened more-than-expected in September, after narrowing in the previous month, data released by the French Customs showed on Friday. The trade gap widened to EUR 5.824 billion from EUR 5.067 billion in the same month last year and EUR 5.085 billion in August. Economists had forecast a smaller shortfall of EUR 4.8 billion.
The greenback dipped to an early low of $1.6104 against the pound sterling Friday, but has since surged to a 3-session high, around $1.5985.
The U.K. visible trade gap widened unexpectedly in September to the highest level in almost a year, driven by a fall in exports and a rise in imports, suggesting that the net trade would be a drag on economic growth.
The visible trade gap rose to GBP 9.8 billion in September, the Office for National Statistics said Friday, while it was forecast to narrow to GBP 9.2 billion from GBP 9.6 billion in August. The shortfall was the largest since October 2012, when it reached GBP 9.9 billion.
U.K. construction output declined 0.9 percent in September with most of the sectors reporting contraction from August, the Office for National Statistics said Friday. Compared to September 2013, the output of construction increased by 5.8 percent. Over the same period, new housing showed annual growth of 13.6 percent.
The buck has rebounded from yesterday’s week and a half low of Y97.604 against the Japanese Yen on Friday, to around Y99.075.