Dollar Advances As Strong U.S. Jobs Data Boosts Fed Tightening Hopes

(RTTNews) - The U.S. dollar firmed against its key counterparts in the European session on Friday, as the nation's job growth exceeded expectations in September, intensifying hopes that the Federal Reserve will continue to raise rates aggressively in the coming months.

Data from the Labor Department showed that non-farm payroll employment jumped by 263,000 jobs in September after surging by an unrevised 315,000 jobs in August. Economists had expected employment to leap by 250,000 jobs.

The unemployment rate dipped to 3.5 percent in September from 3.7 percent in August. The unemployment rate was expected to come in unchanged.

Treasury yields jumped following the report, with the benchmark yield on the 2-year note up by 4.31 percent. Yields move inversely to bond prices.

Markets are now pricing in a 79.6 percent chance of another 75 basis-point interest rate hike from the Fed in November.

The greenback showed mixed trading against its major rivals in the Asian session. While it rose against the pound and the franc, it held steady against the euro. Versus the yen, it dropped.

The greenback appreciated to a 9-day high of 0.9953 against the franc from Thursday's close of 0.9903. Further rally in the currency may challenge resistance around the 1.00 level.

The greenback was up against the pound, at a 4-day high of 1.1091. The pound-greenback pair had ended yesterday's trading session at 1.1161. If the currency rises further, 1.08 is possibly seen as its next upside target level.

Survey data from the Lloyds Bank subsidiary Halifax showed that U.K. house price inflation eased for the third straight month in September to the lowest in eight months.

The house price index climbed 9.9 percent year-over-year in September, slower than the 11.4 percent increase in the previous month.

The greenback touched an 8-day high of 0.9726 against the euro, up from yesterday's close of 0.9790. The currency is likely to find resistance around the 0.96 level.

Data from Destatis showed that Germany's industrial production declined more than expected in August as raw material shortages and supply chain bottlenecks continued to dampen the functioning of many industries.

Industrial output dropped 0.8 percent on a monthly basis in August after remaining flat in July.

The greenback climbed to 145.35 against the yen, its highest level in more than two weeks. At yesterday's trading close, the pair was quoted at 145.13. The greenback may face resistance around the 149.5 region, if it gains again.

Preliminary figures from the Cabinet Office showed that Japan's leading index improved for the first time in four months in August. The leading index, which measures future economic activity, rose to a four-month high of 100.9 in August from 98.9 in July.

Extending its previous session's rally, the greenback firmed to a 9-day high of 0.6370 against the aussie and a 4-day high of 0.5607 against the kiwi. The greenback was worth 0.6408 against the aussie and 0.5656 against the kiwi at Thursday's close. The greenback is seen finding resistance around 0.60 against the aussie and 0.53 against the kiwi.

On the other hand, the greenback fell against the loonie, as strong Canadian jobs data lifted the latter. It edged down to 1.3675 against the loonie, from a 4-day high of 1.3761 seen at 2:35 am ET. The greenback traded at 1.3748 against the loonie at yesterday's close. Should the greenback weakens further, 1.33 is likely seen as its next support level.

Data from Statistics Canada showed that the economy added more jobs than expected in September and the unemployment rate fell.

The employment increased by 21,100 jobs in September, versus expectations for a gain of 19,500 jobs.

U.S. consumer credit for August will be published in the New York session.