By Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – The U.S. dollar slumped on Friday after data showed that the world’s largest economy created more new jobs than expected last month, but suggested signs of slowing with the higher unemployment rate and lower wage inflation.
Nonfarm payrolls increased 261,000 last month, data showed on Friday. Data for September was revised higher to show 315,000 jobs added instead of 263,000 as previously reported. Economists polled by Reuters had forecast 200,000 jobs, with estimates ranging from 120,000 to 300,000.
However, the unemployment rate rose to 3.7% from September’s 3.5%. Average hourly earnings increased 0.4% after rising 0.3% in September, but the rise in wages slowed to 4.7% year-on-year in October after advancing 5.0% in September.
“The U.S. labor market is strong and the data was hot,” said Naeem Aslam, chief market analyst at Avatrade in London.
“However, the devil is in (the) detail(s) and that is the unemployment rate has ticked higher and this may keep a lid on the dollar rally. But for now, one thing is clear: that the Fed has clear path to continue on its hawkish monetary policy stance.”
The dollar fell 0.8% against the yen to 147.11, while the euro rose 1.3% to $0.9870.
The fed funds futures on Friday priced in a 58% chance of a 75-basis-point interest rate hike next month, and a 43% probability of a 50-basis-point increase. The odds of a 75-basis-point rise went as high as 64% immediately after the data.
The Fed’s terminal rate, or the level at which rates peak slipped to 5.16% after payrolls, from about 5.2% just before.
The dollar strengthened across the board for most of the week after Federal Reserve Chair Jerome Powell on Wednesday said the central bank could continue to increase rates if inflation doesn’t slow, causing markets to price in a higher peak for U.S. rates.
========================================================
Currency bid prices at 9:38AM (1338 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 111.6900 112.9700 -1.12% 16.754% +112.9900 +111.5000
Euro/Dollar $0.9865 $0.9750 +1.19% -13.22% +$0.9881 +$0.9745
Dollar/Yen 147.3150 148.2600 -0.63% +27.98% +148.3950 +146.9200
Euro/Yen 145.33 144.55 +0.54% +11.52% +145.4000 +144.2400
Dollar/Swiss 1.0007 1.0138 -1.28% +9.71% +1.0143 +0.9986
Sterling/Dollar $1.1258 $1.1159 +0.91% -16.73% +$1.1296 +$1.1150
Dollar/Canadian 1.3542 1.3750 -1.50% +7.11% +1.3750 +1.3513
Aussie/Dollar $0.6433 $0.6288 +2.31% -11.49% +$0.6454 +$0.6285
Euro/Swiss 0.9873 0.9879 -0.06% -4.80% +0.9887 +0.9848
Euro/Sterling 0.8760 0.8736 +0.27% +4.29% +0.8761 +0.8700
NZ $0.5874 $0.5776 +1.72% -14.16% +$0.5897 +$0.5756
Dollar/Dollar
Dollar/Norway 10.3435 10.5725 -1.16% +18.62% +10.5775 +10.4400
Euro/Norway 10.2064 10.3123 -1.03% +1.95% +10.3264 +10.1837
Dollar/Sweden 11.0127 11.1648 -0.51% +22.12% +11.2050 +10.9865
Euro/Sweden 10.8644 10.9201 -0.51% +6.16% +10.9237 +10.8470
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Joice Alves and Alun John in London; Editing by Mark Potter, Kirsten Donovan and Jonathan Oatis)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.