Dollar index jumps after US payrolls beat forecasts
TLT•The dollar index rose 0.63% to 102.12 after US payrolls increased by 165,000, above the 65,000 forecast, and unemployment dipped to 4.1%. Market odds of a December Fed rate hike of at least 25 basis points climbed to nearly 80%.
1. Payrolls lift dollar
The dollar index rose 0.63% to 102.12 on Friday, on pace for its biggest daily percentage gain in seven weeks, after US nonfarm payrolls increased by 165,000 last month. Economists had forecast a 65,000 increase; September’s gain was revised up to 60,000, and the unemployment rate dipped to 4.1%.
2. Rate expectations rebound
Market odds of a Federal Reserve rate increase of at least 25 basis points at its December meeting moved back toward 80% after falling to about 67% on Thursday. Treasury yields rose after the jobs report: the 10-year yield gained 3.1 basis points to 4.868%, and the two-year yield rose 5.5 basis points to 4.532%.
3. Other currencies weaken
The euro fell 0.55% to $1.1157, sterling dropped 0.62% to $1.3366, and the yen weakened 0.3% against the dollar to 158.20. New York Fed President John Williams said US growth remained resilient but inflation was too high and needed to return to 2%.
