(News Bulletin 247) – The dollar appreciated significantly following the publication of job creations that were more robust than expected.

American employment rarely leaves the market indifferent. This is still the case this Friday. If the CAC 40 is only weakening slightly for the moment (0.8% compared to 0.7% before the publication of these figures), the euro is declining more clearly. Or rather, the dollar is clearly strengthening.

Around 3:25 p.m., the euro zone currency fell by 0.5% against the greenback, to 1.0834 dollars, while it was almost stable before the American employment figures.

Additionally, the yield on the 10-year U.S. Treasury bond tightened significantly, rising 12.5 basis points (0.125 percentage points) to 4.416%.

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The equation gets complicated for the Fed

In May, the American economy created 272,000 jobs, far more than the 190,000 expected by economists surveyed by the Wall Street Journal. The unemployment rate stood at 4% compared to 3.9% anticipated by these same economists. The average hourly wage also increased by 0.4% over one month in May, compared to an expected increase of 0.3%.

“These data have undoubtedly put an end to discussions on a possible cut in interest rates in July (…)” from the American Federal Reserve (Fed), underlines Naeem Aslam of Zaye Capital.

“The larger-than-expected increase of 272,000 non-agricultural jobs in May will allay recent fears that the economy had suddenly bottomed out,” said Capital Economics.

“As average hourly wages increased by 0.4% over one month, the Fed will continue to focus on the upward risks of inflation rather than on the risks of deterioration in the real economy,” adds the think tank.