Categories: Business

US Dollar Jumps After Higher Pay Data

The US dollar is at its highest of the day following a surprise rise in US payroll data in the first quarter. The employment cost index in the first quarter increased by 1.2% against 1.2% expected, reaccelerating after months of decline.

The data comes as the Fed prepares to begin its two-day meeting in Washington. Market prices for rate cuts this year fell to 32% from 35.

Earlier today, WSJ’s Nick Timiraos released his Fed preview and he says the Fed will signal it has the courage to keep rates high for longer.

The US dollar rose broadly on the data, with EUR/USD falling to 1.0690 from 1.0720. Cable also fell about 30 pips while USD/JPY hit a session high of 157.37, another sign that fundamentals are driving the USD/JPY bid.

Risk assets fell following the data, with S&P 500 futures now trading 21 points lower.

The day’s data slate will continue with home price data at the top of the hour, followed later by the Chicago PMI and the 10 a.m. ET consumer confidence report as the highlight.

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Rana Adam

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