Dollar jumps as US jobs growth surges

New York

THE US dollar jumped on Friday after data showed jobs growth beat expectations in February, backing up the view of Federal Reserve officials who have said that a recent rise in US government bond yields is justified by an improving economic outlook.

The jobs improvement came amid falling new US Covid-19 cases, quickening vaccination rates and additional pandemic relief money from the government, putting the labour market recovery back on firmer footing and on course for further gains in the months ahead.

Nonfarm payrolls surged by 379,000 jobs last month, after rising 166,000 in January. In December, payrolls fell for the first time in eight months. Economists polled by Reuters had forecast February payrolls increasing by 182,000 jobs.

A roll-out of Covid-19 vaccines and impending US fiscal stimulus have boosted confidence in an economic recovery, adding fuel to expectations of higher inflation.

The dollar index jumped as high as 92.201, the highest since Nov 25, before retracing back to 91.965, still up 0.36 per cent on the day.

The euro fell as low as US$1.1892, the lowest since Nov 26, before bouncing back to US$1.1915, down 0.49 per cent on the day.

Benchmark 10-year Treasury yields hit a one-year high of 1.625 per cent, and were last at 1.551 per cent.

The jobs data came after Fed chairman Jerome Powell on Thursday disappointed investors who were expecting him to express concerns about rising bond yields. Mr Powell stuck to his stance of keeping interest rates low until the economy has recovered, adding that the sell-off in Treasuries was not "disorderly".

St Louis Federal Reserve president James Bullard said on Friday that the run-up in yields reflects improving expectations for the economy.

The Swiss franc and Japanese yen continued to weaken against the greenback on Friday on expectations that global growth will lag that of the United States.

The Swiss franc fell to a seven-month low of 0.9318 francs per dollar, before paring losses to 0.9306.

The yen plumbed a nine-month low of 108.63 yen per dollar, before bouncing back to 108.33.

Risky currencies including the Australian dollar also weakened against the greenback. The Aussie was last down 0.46 per cent at US$0.7683. It has dropped from a three-year high of US$0.8007 the previous week.

Sterling briefly fell below US$1.38 to a three-week low. It was last down 0.42 per cent at US$1.3838. REUTERS