The US dollar rose after a report showed US jobs growth exceeded forecasts, backing the case for the US Federal Reserve to continue raising interest rates this year.
A greenback index touched the highest in more than a decade before paring gains after US Department of Labor data showed lower-than-forecast wage patterns tempered the employment increase.
The US dollar was also bolstered as the Chinese central bank set a higher yuan fix and state-controlled funds were said to buy equities, damping turmoil that roiled international markets this week.
The US dollar’s climb was moderated by “a general risk-off tone that wasn’t really overridden by a strong jobs number,” Royal Bank of Scotland Group PLC currency strategist Brian Daingerfield said.
Market participants are “taking some risk off the table ahead of the weekend,” he said.
The US currency has been restrained this year on concern that China’s slowdown could hamper international growth. Tolerance for a weaker US currency in the world’s second-largest economy is viewed as evidence policymakers are struggling to revive growth. The turmoil has largely benefited the yen, which rose 2 percent against the US dollar this week as investors sought the safest assets.
The US dollar rose 0.2 percent to US$1.091 per euro and was little changed at ￥117.60 as of 3:20pm in New York. The Bloomberg Dollar Spot Index, which tracks the US currency versus 10 peers, added 0.3 percent to 1,240.42.
The measure has gained for nine of the past 10 days.
The 292,000 jobs gain exceeded the highest forecast in a Bloomberg survey and followed a 252,000 increase in November that was stronger than previously estimated, a US Department of Labor report showed.
The jobless rate held at 5 percent.
“While the number was positive, I don’t know that it was strong enough to offset the current level of uncertainty regarding China or the health of the global economy,” Commonwealth Foreign Exchange Inc chief market analyst Omer Esiner said in Washington. “That’s partially why we’re seeing the dollar show a somewhat muted reaction to this data.”
While employers continue to aggressively add to headcounts, worker pay has yet to show a sustainable pickup. Average hourly earnings were unchanged from the prior month. They increased 2.5 percent over the 12 months ended last month. The median forecast called for a 2.7 percent year-over-year gain.
Minutes from the US Fed’s policy meeting last month showed officials are concerned China “could find it difficult to navigate the cyclical and structural changes under way in its economy.”
The US Fed lifted its target rate by 0.25 percentage points last month after holding it near zero for seven years and policymakers forecast four more increases this year.
The British pound fell 0.7 percent to US$1.4519 as of 5pm London time, after sliding to US$1.4507, the lowest since June 2010.
That left it 1.6 percent lower this week.
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