Positive Employment Data Strengthens the Dollar

The most significant data that was published from the U.S. economy during last week has referred to the jobs sector. The Non-Farm Employment Change failed to reach expectations for a 521,000 rise, yet the end result was still extremely positive. The report showed that the payrolls in the U.S. have climbed by 431,000 on May, marking a 10-hear high. In addition, the Unemployment Rate dropped back to 9.7% during May. These two employment indicators have proven that the U.S. economy is recovering despite the European debt crisis. In addition, the housing sector continues to show recovery signals as well. The Pending Home Sales report, which measures the change in the number of homes under contract to be sold, have rose by 6.0% during April. It seems that as long as the leading economic indication, such as housing and employment, will continue to deliver positive data, the Dollar will continue to strengthen.

As for this week, many interesting publications are expected from the U.S. economy. The most significant news is expected close to the weekend when the Trade Balance, the Unemployment Claims, the Retail Sales and the Consumer Sentiment reports will be published. If the reports will continue to provide recovery signals, the Dollar is likely to strengthen further against the major currencies.