After NFP, the US Dollar Index continues to recover

The US Dollar Index spikes to 102.29 and retreats to 102.00.  March US jobs report mostly in line with expectations. Wall Street’s holiday will likely keep price action limited, normal activity to return on Tuesday.

The US Dollar Index (DXY) rose to 102.29 after the release of the US March jobs report and then pulled back toward 102.00, amid risk appetite. The numbers boosted US yields and equity futures on a tight volume session.

Investor focus moves to CPI after NFP. Contrary to the market expectation of 240K, the US Labor Department reported that Nonfarm Payrolls grew by 236K in March. Despite an increase in the labour force, the unemployment rate decreased from 3.6% to 3.5%. Earnings growth of 0.3% MoM was in line with expectations.

The Dollar reacted favourably, which could be explained by the fact that the anticipated negative surprise from the most recent economic statistics did not materialise. Now attention turns to next week’s US Consumer Price Index data. On Friday, the DXY is climbing as it trades just around 102.00. Although recording the third straight gain, the week-over-week performance remains negative. It will be the fourth consecutive weekly drop.