The U.S. dollar saw significant gains following a remarkable U.S. jobs report for September, reinforcing expectations of another interest rate hike by the Federal Reserve later this year. Data revealed that U.S. nonfarm payrolls surged by an impressive 336,000 jobs last month, surpassing economists’ predictions of a 170,000 job increase. Additionally, the figures for August were revised upward, showing the addition of 227,000 jobs instead of the previously reported 187,000.
In response to this strong economic data, the dollar index climbed by 0.6% to reach 106.96. Against the Japanese yen, the greenback also advanced by 0.7%, reaching 149.46.
The robust payrolls report and the upward revision of August numbers highlight the challenging environment for shorting the dollar in the current macroeconomic landscape, according to Simon Harvey, head of FX analysis at Monex Europe in London. He noted that whether it’s the sell-off in Treasuries affecting risk conditions or the U.S. exceptionalism narrative supporting the dollar, the currency remains resilient.
These developments in the U.S. job market reinforce the view that the Federal Reserve may proceed with its tightening of monetary policy, further boosting the dollar’s strength in the global currency market.