Dollar jumps after strong US payrolls report
Benchmarks Nifty25,030.35493.75FEATURED FUNDS★★★★★UTI Aggressive Hybrid Fund Regular Plan-Growth5Y Return9.96 % Invest NowFEATURED FUNDS★★★★★Motilal Oswal Midcap Fund Direct-Growth5Y Return19.25 % Invest NowEnter search…
The US dollar index jumped significantly following the Labor Department's report indicating an increase of 165,000 jobs last month, which far exceeded economists' forecasts. As a result, the probability of a rate hike from the Federal Reserve climbed to nearly 80% for next month. Moreover, Federal Reserve officials voiced concerns about ongoing inflation, leading to declines for other currencies such as the euro and sterling against the dollar.
The US dollar index surged on Friday and was poised for its biggest daily percentage gain in nearly five months after a stronger-than-expected US payrolls report solidified expectations for a rate hike from the Federal Reserve next month.The Labor Department said US nonfarm payrolls jumped by 165,000 jobs last month, topping the 65,000 estimate of economists polled by Reuters, after an upwardly revised 60,000 gain in September. The unemployment rate dipped to 4.1%.
The report gives the Federal Reserve latitude to continue to hike interest rates, and market expectations for an increase of at least 25 basis points at the central bank's December meeting moved back up towards 80% in the wake of the report, according to the CME FedWatch Tool.
The dollar index, which measures the greenback against a basket of currencies, surged 0.77% to 102.26, with the euro tumbling 0.67% at $1.11437. The dollar was on track for its biggest daily percentage gain since June 17, while the euro was on pace for its biggest daily drop since October 1.
For the week, the dollar was up 0.3% while the euro shed 0.1% and was on track for a third straight weekly decline.
Live Events
Expectations the Fed would hike next month had fallen to about 67% on Thursday as US equities plummeted, with the S&P 500 wiping out about $3 trillion in market value while the Nasdaq suffered its biggest one-day percentage drop in 19 months on fears that tougher government regulations on the AI buildout after the US midterm elections would stunt economic growth.
Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, lawmakers, congressional aides and advocates said.
Market Dynamics Shift After Data
The dollar was higher before the jobs data, buoyed by safe-haven demand, as the selloff in AI stocks spread worldwide, although US stocks had stabilized by the opening bell and the Nasdaq rallied more than 1% heading into the latter stages of the trading day.Treasury yields moved higher in the wake of the jobs report, with the 10-year yield up 1.6 bps to 4.85% and the 2-year yield rising 4.1 bps to 4.52%.
"It's the same old conversation of, at any given moment, is the dollar trading more on a safe-haven basis, or is it trading more on an interest rate differential basis? And those things, sometimes it's one or the other, and they can be completely at odds with one another, and it's not really rational," said Eugene Epstein, head of trading and structured products at Moneycorp in Stamford, Connecticut.
"Now that the dust is kind of settling a little bit, the market's digesting the new normal for the next two years, I would argue that the correlations should start being a little more rational again going forward."
Central Bankers Address Inflation
Comments from Fed officials on Friday supported views for a rate hike. New York Federal Reserve President John Williams said on Friday that US economic growth has remained remarkably resilient in the face of successive shocks but inflation is too high and it is essential to bring it back to 2%.Separately, St. Louis Federal Reserve President Alberto Musalem said that inflation remains a top concern in conversations he has with businesses in his Midwestern district while Federal Reserve Bank of San Francisco President Mary Daly said the Fed will likely still need to hike rates further even with the "painful" tech stock selloff.
Sterling tumbled 0.71%, on pace for its biggest daily drop since September 23, to $1.3355, pulling back following a climb to a more than seven-week high on Thursday after the Bank of England raised interest rates for the first time in over three years.
The pound was off nearly 0.3% on the week, and set for its first weekly decline after notching gains for three straight weeks.
The Japanese yen weakened 0.47% against the greenback to 158.430. Japanese Prime Minister Sanae Takaichi unveiled a plan to tap proceeds from the Bank of Japan's sales of exchange-traded funds to finance her flagship investment projects, as the AI-fueled market rout threatened to dent tax revenue.
Bank of Japan Governor Kazuo Ueda said the central bank expects underlying inflation to stay around its 2% target but recognizes there are "some upside risks."
The yen was off nearly 0.6% on the week, which would mark its biggest weekly percentage decline since a drop of more than 2% in the week ended September 18.
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our ETMarkets WhatsApp channel)
Read More News onFederal Reserve rate hikeUS dollar indexUS nonfarm payrollsstrong US payrolls reportinterest rates
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
...moreless(You can now subscribe to our ETMarkets WhatsApp channel)
Read More News onFederal Reserve rate hikeUS dollar indexUS nonfarm payrollsstrong US payrolls reportinterest rates
(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)
Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
...morelessPrime ExclusivesInvestment IdeasStock Report PlusePaperWealth EditionJunk bonds are cracking at the bottom. Will the noise get loud enough to make ‘junk bond’ a household term again?
PNG connections rise half a million, but how many use piped gas for cooking?
Some elections matter more than you know: No crop changed in the fields, yet sugar, coffee and soya got cheaper in a day
You can buy a walkie-talkie online. But can you legally use it?
KYB and KYC: Quick commerce, the Damani premium and what DMart must deliver – 3rd and concluding part
KYC and KYB: Inside Damani’s DMart, the retail chain for the middle class. And stock for the long term? – Part 2 of 3
- 1
- 2
- 3
& personalised newslettersLogin NowUnlimited AccessStarting @ Rs120/monthGet access to exclusive stories, expert opinions &
in-depth stock reportsSubscribe NowET
Unlock Access to All Exclusives with ETPrime FREE TRIAL
15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers
Trial offer expiring in00 : 05 : 00
I'd rather pay ₹2599 nowUh-oh! This is an exclusive story available for selected readers only.
Worry not. You’re just a step away.
Prime Account Detected!
It seems like you're already an ETPrime member with
Login using your ET Prime credentials to enjoy all member benefits
Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.
Unlock ETPrime's Exclusive Stories Today!
Big Price Drop! Flat 40% Off
Student Only OfferAlready a Member? Sign In nowAlready a Member? Sign In nowAlready a Member? Sign In nowOffer Exclusively For You
Save up to Rs. 700/-
ON ET PRIME MEMBERSHIP
Avail OfferOffer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail OfferOffer Exclusively For You
Get 1 Year Free
With 1 and 2-Year ET prime membership
Avail OfferOffer Exclusively For You
Get Flat 40% Off
Then ₹ 1749 for 1 year
Avail OfferOffer Exclusively For You
ET Prime at ₹ 49 for 1 month
Then ₹ 1749 for 1 year
Avail OfferSpecial Offer
Get flat 40% off on ETPrime
Avail OfferAvail OfferClaim NowAlready a Member? Sign In nowNeed Assistance?
Connect with an ETPrime expert for personalized support and guidance
+91 9484700004'; }); } if(listing) { var h3 = "You tried reading " + listArr.length + " locked stories in the past " + threshold + " days.", h4 = "Become an ET Prime member and don't miss out on these exclusive stories."; var html = '' + h3 + '
' + h4 + '
- ' + listing + '
What’s Included with
ETPrime Membership
1Exclusive Insights That Matter
Uncover the truth with our investigative stories
Make strategic moves using the real-world case studies
Read industry-specific stories to identify emerging trends
Spot opportunities with in-depth insights that matter
Trump temper on H-1B visas is forcing Indians to do these things to stay put in US
What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.
Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?
The problem with lab grown diamonds
Why a falling rupee is a better option for the economy
A list of top 20 momentum stocks that have delivered massive returns in one year
2Invest Wisely With Smart Market Tools & Investment Ideas
Alpha Trade
Get daily trade ideas from SEBI-registered research analysts.
Investment Ideas
Grow your wealth with stock ideas & sectoral trends.
Stock Reports Plus
All-in-one stock research with Stock Score, peer comparison & key signals.
BigBull Portfolio
Get to know where the market bulls are investing to identify the right stocks.
Stock Analyzer
Check the score based on the company's fundamentals, solvency, growth, risk & ownership to decide the right stocks.
Market Mood
Analyze the market sentiments & identify the trend reversal for strategic decisions.
Stock Talk Live at 9 AM Daily
Ask your stock queries & get assured replies by ET appointed, SEBI registered experts.
3Stay informed anytime, anywhere with ET ePaper
ePaper - Print View
Read the PDF version of ET newspaper. Download & access it offline anytime.
ePaper - Digital View
Read your daily newspaper in Digital View & get it delivered to your inbox everyday.
Wealth Edition
Manage your money efficiently with this weekly money management guide.
TOI ePaper
Read the PDF version of TOI newspaper. Download & access it offline anytime.
Deep Explainers
Explore the In-depth explanation of complex topics for everyday life decisions.
Health+ Stories
Get fitter with daily health insights committed to your well-being.
Personal Finance+ Stories
Manage your wealth better with in-depth insights & updates on finance.
5Enjoy Complimentary Subscriptions From Top Brands
Stream new documentaries from all across the world every day.
Stories you might be interested in
Figures reflect the source report and its stated period. This article is for information and is not investment advice.
