Dollar jumps to seven-week high on strong US jobs report
9:19 am Friday, October 04th, 2024
By Karen Brettell
NEW YORK (Reuters) – The dollar jumped to a seven-week high on Friday after data showed that employers added more jobs than expected in September, leading traders to pare bets that the Federal Reserve will cut rates again by 50 basis points at its November meeting.
Nonfarm payrolls increased by 254,000 jobs last month. Economists polled by Reuters had forecast payrolls rising by 140,000 positions.
The unemployment also unexpectedly slipped to 4.1% from 4.2% in August.
It is a “blockbuster payrolls report by any measure. I think a no-landing scenario for the U.S. economy has suddenly become far more plausible,” said Karl Schamotta, chief market strategist at Corpay in Toronto.
“Rate cut expectations are being pulled back and the expectation now would be for a Federal Reserve that treads far more cautiously in easing policy,” Schamotta said.
Improving economic data and more hawkish comments from Fed Chair Jerome Powell on Monday, in which he pushed back against expectations of continuing jumbo-sized rate cuts, has led traders to reduce bets on a 50-basis-point reduction at the Fed’s Nov. 6-7 meeting.
Those odds fell further after Friday’s data. Traders are now pricing in only a 10% chance of a 50-bps-rate cut, down from around 32% earlier on Friday, the CME Group’s FedWatch Tool shows.
The dollar index reached 102.64, the highest since Aug. 16, and the euro slipped to $1.0959, the lowest since Aug. 15.
The dollar gained to 148.80 yen, the highest since Aug. 16.
(Reporting by Karen Brettell; editing by Mark Heinrich)
