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The
dollar hit one-week peaks against the euro and the Swiss franc,
and turned positive versus the yen after the jobs data.
U.S. non-farm payrolls increased by 255,000 jobs last month,
after an upwardly revised 292,000 surge in June. Economists
polled by Reuters forecast an increase of 180,000 in July.
"Another constructive U.S. labor market report is a welcome
development for Fed officials, with tentative signs of growing
wage pressures particularly appealing to the hawks," said Viraj
Patel, FX strategist at ING Wholesale Banking in London.
"Moreover, today's release couldn't have come at a better time
for a flailing dollar, which has been under pressure since last
week's soft Q2 GDP (data)," he added.
After the U.S. employment report, Fed fund futures priced in an
18 percent chance the Fed will hike rates at its policy meeting
next month, from 9 percent late Thursday, according to the CME's
FedWatch tool. For the December meeting, futures showed a
roughly 47 percent probability of a hike, compared with about 32
percent late Wednesday.
But Brian Dolan, chief of financial education and head market
strategist at DriveWealth LLC in Chatham, New Jersey, believes
the "odds remain stacked" against a Fed rate hike this year,
given the struggling global economic picture.
But he noted that risk sentiment will improve with the jobs data
and the dollar should stabilize after recent declines.
In late trading, the dollar index <.DXY> rose 0.5 percent to
96.212, recovering from last week's poor showing when it fell 2
percent for its worst weekly performance since April.
Against the yen, the dollar rose 0.6 percent to 101.77 yen
<JPY=>. The dollar posted it largest one-day gain in more than a
week.
The greenback also hit a one-week high against the Swiss franc.
The dollar was last at 0.9796 franc <CHF=>, up 0.6 percent.
The euro, meanwhile, slid to a one-week low against the dollar
and last traded at $1.1088 <EUR=>, down 0.3 percent.
(Editing by Jeffrey Benkoe)
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