US Dollar Strengthens As Jobs Data Back Fed Rate Hike Bets
New York (Dec 5) The US dollar gained ground against its major rivals on Friday, as the economy added more jobs than forecast in November, cementing hopes for a rate hike by the Federal Reserve at its meeting in December.
Data from the Labor Department showed that non-farm payroll employment jumped by 211,000 jobs in November compared to economist estimates for an increase of about 190,000 jobs.
Job growth in September and October was also upwardly revised to 145,000 jobs and 298,000 jobs, respectively, reflecting 35,000 more jobs than previously reported.
The unemployment rate held at the more than seven-year low of 5.0 percent set in the previous month, matching expectations.
Meanwhile, the Commerce Department report showed that the U.S. trade deficit unexpectedly widened in the month of October as exports fell at a faster rate than imports.
The Commerce Department said the trade deficit climbed to $43.9 billion in October from a revised $42.5 billion in September.
Economists had expected the trade deficit to narrow to $40.6 billion in October from the $40.8 billion originally reported for the previous month.
The data comes on the heels of hawkish statement by the Fed Chair Yellen, who signaled that the economy has "recovered substantially" from the Great Recession and the rate hike is near.
The greenback showed mixed performance in the European session. While the currency rose against the yen and the franc, it fell against the euro. Against the pound, it held steady.
Subsequent to the data, the greenback appreciated to 1.0034 against the franc, compared to 0.9932 hit late New York Thursday. The greenback-franc pair may challenge resistance around the 1.01 zone.
Figures from the Federal Statistical Office showed that Swiss consumer prices fell at a stable rate for the third straight month in November.
The consumer price index declined 1.4 percent year-over-year in November, the same rate of decrease as in the previous three months. Economists were looking for a 1.3 percent decrease.
The greenback that ended Thursday's trading at 122.59 against the yen edged up to 123.37. The next possible resistance for the greenback may be found around the 124.00 mark.