Surprise Increase in US Payrolls Sends Dollar Soaring

A surge in the dollar on Friday drove the euro, yen, and pound to session lows, while euro zone bond yields saw an uptick. This followed the release of data indicating that the U.S. economy had added more jobs than anticipated in May, thereby reducing the likelihood of multiple rate cuts from the Federal Reserve.

According to the U.S. Labor Department, nonfarm payrolls saw an increase of 272,000 jobs last month, surpassing expectations for a rise of 185,000.

The euro declined by up to 0.57% to reach a low of $1.0828, down from around $1.0897 just before the data release. Similarly, the pound dropped 0.45% to $1.2734 from $1.281, and the yen weakened to approximately 156.54, resulting in the dollar rising by 0.57% for the day.

German 10-year government bond yields, serving as a benchmark for the broader euro zone, rose by 8 basis points to 2.621%. Meanwhile, 10-year Italian yields climbed by 11 bps to 3.969%.

The STOXX 600 index experienced a 0.56% decline for the day.