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Dollar advances on robust US jobs report, backs Fed's no-rate-cut stance

Friday's jobs report provided a respite from all the pessimism on the economy amid poor numbers and persistent uncertainty on US-China trade negotiations

Reuters  |  New York 

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The dollar rose on Friday after five straight days of losses, bolstered by data showing the created way more jobs than expected in November, backing the Federal Reserve's stance of keeping interest rates on hold after cutting them three times this year.

Gains in the dollar though were modest despite a robust jobs number. The greenback has been pummeled all week due to a slew of weaker-than-expected US data in manufacturing and services with investors coming to grips with the reality that the is slowing down.

Friday's jobs report provided a respite from all the pessimism on the amid poor numbers and persistent uncertainty on US-China trade negotiations.

Data showed nonfarm payrolls increased by 266,000 jobs last month, with manufacturing recouping all 43,000 positions lost in October. Economists polled by Reuters had forecast payrolls rising by 180,000 jobs in November.

Despite Friday's gains however, the dollar was still on track for its worst weekly percentage loss since mid-October.

"No question today's jobs report is strong, but is it strong enough for people to change their views about the economy?" said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

"I still think the is weakening and I don't think today's number is going to change people's expectations for Q4 GDP (gross domestic product), which I think is headed toward 1%," he added.

Earlier in the week, US data showed dismal figures on private payrolls and services activity, and a weak manufacturing activity index and construction spending figures

In midmorning trading, the dollar index gained 0.3% to 97.674. For the week, the dollar was down 0.6%, its largest weekly loss in 1-1/2 months.

The dollar was up slightly against the yen at 108.84 yen , but still poised for its worst weekly performance in nearly two months.

The euro, on the other hand, fell to 1.1074, down 0.3% .

Sterling cooled off a bit on Friday, down 0.3% at $1.3126 and little changed against the euro at 84.36 pence . The pound, though, was close to a 2-1/2-year high as traders grew more confident uncertainty over Brexit would end soon.

First Published: Fri, December 06 2019. 20:17 IST
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