In the month ofOctober, non- farm payrolls in the U.S. increased by 531,000 jobs.
Graphic: WorldFX rates: tmsnrt.rs 2 RBWI 5 E New throughout, updates prices, market activity and comments New York, Nov 5 : The dollar jumped on Friday to hit its highest level in more than a year, after data showed stronger U.S. job growth than expected in October, but retreated a bit in late trading as risk appetite improved and stocks rallied.
Nonfarm payrolls increased by 531,000 jobs last month, above the 450,000 forecast, as the latest surge in COVID - 19 infections subsided. August and September data showed an additional 235,000 jobs created over those months.
The dollar index, which measures the dollar against a basket of six rivals, rose as high as 94.634 after the jobs report, its firmest since Sept. 25, 2020.
The safe-haven currency was pushing back a bit, as risk appetite improved and stocks staged a broad rally. The dollar was last down 0.096% at 94.234, but was still up around 0.1% for the week, which was marked by a bevy of central bank meetings that forced investors to reset rate increase expectations.
The Fed Chair Jerome Powell said he was not rush to increase borrowing costs, as there was still ground to cover to reach maximum employment. The central bank announced a $15 billion monthly Tapering of its $120 billion in monthly asset purchases.
The payrolls are certainly in line with Powell's statement at the Fed press conference, where he stated that job gains of this magnitude are consistent with the notion of making substantial further progress, TD Securities strategists said in a note.
The conditions are in place for a wide grind higher in the dollar, which is also linked to the seasonal trend for November, they said.
One of the weakspots in the U.S. employment report was a flat participation rate, which could end up spurring the Fed to action faster than expected, said Sal Guatieri, senior economist at BMO Capital Markets.
He said that the trend could determine the course of Fed policy as continued weakness in participation will only lead to a faster pace of tapering and earlier rate hikes which could lead to a faster pace of tapering and earlier rate hikes.
The Bank of England's decision on Thursday not to lift rock-bottom benchmark rates proved the biggest shock for markets and pushed the sterling to its biggest one-day fall in more than 18 months, by as much as 1.6% on the day.
The pound fell as much as 0,5% on Friday, hitting a new one-month low of $1.34250. It was last down 0.07%.
Despite inflationary pressure and held rates, the Reserve Bank of Australia stuck to its dovish stance. The Aussie was still on track for a 1.6% weekly fall after the overnight session, but was up 0.01% at $0.73995, but was still on track for around a 1.6% weekly fall.
The European Central Bank President Christine Lagarde was holding back on Wednesday against market bets for a rate increase as soon as next October, and said it was very unlikely that such a move would occur in 2022.
The euro was up 0.08% at $1.15635.
The price of bitcoin was down by 0.89% to $60,908, among cryptocurrencies. 40 had traded sideways since it hit its all-time high above $67,000 last month.