On the foreign exchange market, the euro fell slightly on Friday. The common currency was a quarter of a cent lower at $ 1.0720 in the evening. The reason for the decline is speculation about a tighter monetary policy by the US Federal Reserve, which strengthened the dollar. A surprising number of jobs were created on the US labor market in May. The companies created 390,000 new jobs. Economists had only expected 325,000. The unemployment rate in May remained at the previous month’s level of 3.6 percent – a level that should be in line with the full employment target of the Fed. “The US labor market is in top form,” said Thomas Gitzel from VP Bank. The Fed should now feel confirmed in its course of rapid interest rate hikes.
In bond markets, yields continued to climb after US jobs data. The US 10-year bond yielded at 2.983, down from 2.92 percent. The return on the German counterparts climbed from 1.229 to 1.289 percent.
The Turkish lira continued to weaken. In return, the dollar appreciated by half a percent to 16.52 lira. The Turkish national currency has lost around a fifth of its value since the beginning of the year. Last year it lost more than 40 percent against the dollar. Experts blame the weakening national currency for the sharp rise in prices because it means that imports, on which the country with few natural resources is dependent, are becoming significantly more expensive. Consumer prices in Turkey increased in May at the highest rate since October 1998. Goods and services cost an average of 73.5 percent more than a year earlier, the statistics office announced on Friday. The slide in the lira was triggered by interest rate cuts by the central bank, which made the national currency less attractive to investors.