US Dollar Index (DXY) Tops 93.00 As Economy Adds 916k New Jobs in March

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The US Dollar Index (DXY) is looking to end the holiday-shortened trading week above 93.00 following a monster US jobs report. The index has enjoyed a decent week, but the greenback had an impressive first quarter, rallying more than 3% and defying market expectations. With rising Treasurys and better-than-expected labor numbers, could the buck sustain the momentum in the second quarter?

In March, the US economy added 916,000 new jobs, beating the median estimate of 647,000, the Bureau of Labor Statistics (BLS) reported. The January and February numbers were also revised upward by a combined 156,000, rising 67,000 to 233,000 in January and 89,000 to 468,000 in February.

According to the report, the unemployment rate clocked in at 6%, down from 6.2% in the previous month. This is the lowest jobless rate since February. But Labor Department officials noted that the official unemployment rate does not include the roughly 4.4 million Americans who lost their positions last year and exited the labor market.

The employment gains were led by the leisure and hospitality sector, adding 280,000. Government payrolls surged 136,000 while construction activity increased 110,000. This was followed by professional and business services (66,000), manufacturing (53,000), and transportation and warehousing (48,000)

Average hourly earnings slid 0.1%, average weekly hours jumped to 34.9, and the labor force participation rate rose to 61.5%.

US DOLLAROverall, the US economy is still short approximately eight million jobs that existed before the coronavirus pandemic paralyzed the world’s largest economy. At the same time, falling coronavirus infections, states reopening their economies, and warmer weather contributed to the better-than-expected jobs report.

Treasury yields surged on Good Friday, with the benchmark 10-year bond picking up 0.037% to 1.716%. The one-year bill edged up 0.005% to 0.068%, while the 30-year bond rose 0.02% to 2.36%.

The DXY, which gauges the buck against a basket of currencies, advanced 0.11% to 93.03, from an opening of 92.89. The index will finish the week with a 0.3% gain, bringing its year-to-date rally to nearly 3.5%.

The USD/CAD currency pair climbed 0.17% to 1.2569, from an opening of 1.2547, at 14:22 GMT on Friday. The EUR/USD dropped 0.19% to 1.1757, from an opening of 1.1778.

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