Dollar Climbs to Seven-Week High Following Strong US Jobs Report, Reuters Reports

By Karen Brettell

NEW YORK – The dollar surged to a seven-week high on Friday following the release of employment data that revealed employers added more jobs than anticipated in September. This prompted traders to reduce their expectations for a 50-basis-point rate cut by the Federal Reserve at its November meeting.

Nonfarm payrolls rose by 254,000 in September, significantly surpassing economists’ forecasts of a 140,000 increase. Additionally, the unemployment rate unexpectedly fell 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," remarked Karl Schamotta, chief market strategist at Corpay in Toronto.

Schamotta noted, "Rate cut expectations are being pulled back, and the anticipation now is for a Federal Reserve that approaches the easing of policy with greater caution."

As a result of improving economic data and more hawkish remarks from Fed Chair Jerome Powell earlier in the week, traders have scaled back their projections regarding a significant rate cut in November. Specifically, expectations of a 50-basis-point reduction have dropped further following Friday’s data. Currently, traders are pricing in only a 10% likelihood of such a cut, down from approximately 32% earlier on Friday.

The dollar index reached 102.64, marking its highest level since August 16, while the euro declined to $1.0959, its lowest since August 15. The dollar also strengthened against the yen, trading at 148.80, a peak not seen since mid-August.