NEW YORK: The dollar jumped on Friday after data showed that US employers added 162,000 jobs in August, well above the 56,000 additions expected by economists, boosting bets on a September Federal Reserve interest rate hike, but then pared much of the gains as traders waited on next week’s inflation data.
August’s jobs gains follow an unexpected 23,000 job decline in July. The unemployment rate held steady at 4.1 percent.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.13 percent to 99.10, with the euro down 0.07 percent at USD1.1616.
Against the Japanese yen, the dollar weakened 0.04 percent to 155.72.
The yen has surged this week as traders boost bets on more or faster Bank of Japan interest rate hikes and is testing the 155.21 level, which was its high reached after last month’s US-Japanese intervention. If it breaks through this, it will take the yen to its strongest level since May 6.
Japan’s top currency diplomat, Atsushi Mimura, said on Friday he remained on alert to exchange-rate moves, maintaining a warning on Tokyo’s readiness to intervene in the market to combat excessive yen declines.
Traders are also speculating on whether Japanese investors, including insurance companies and pension funds, will pull investments out of US Treasuries and into Japanese government bonds as the Japanese debt yields rise.
In cryptocurrencies, bitcoin fell 2.36 percent to USD79,563.
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