US dollar rises from 2-week low after jobs numbers surprise

New York

THE US dollar advanced from 2-week lows on Friday (Feb 4) after data showed that the world's largest economy created far more jobs than expected, raising the chances of a larger Federal Reserve interest rate increase at the March policy meeting.

The dollar index, a gauge of its value against 6 major currencies, rose 0.1 per cent to 95.446, after falling to a 2-week low of 95.136 earlier amid a resurgent euro.

But the dollar was still down 1.8 per cent on the week, on pace for its largest weekly percentage decline since November 2020.

Data showed US non-farm payrolls grew 467,000 jobs last month.

Data for December was revised higher to show 510,000 jobs created instead of the previously reported 199,000.

The dollar also tracked the surge in US Treasury yields. US 2-year and 5-year yields, both of which reflect interest rate expectations, rose to 1.2970 per cent, the highest since late February 2020, and 1.79 per cent, its best level since July 2019, respectively.

The euro was still up on the day, rising 0.1 per cent at US$1.1455. It was up 1.7 per cent on the week, on track for its best weekly performance since late March 2020, benefiting from a hawkish turn by the European Central Bank (ECB) on Thursday.

The euro stalled around the resistance level of US$1.1480 because of dollar gains following the US employment report.

Sterling also has been among the big currency movers during the week, after the Bank of England raised rates to 0.5 per cent on Thursday - marking the first back-to-back increases by the central bank since 2004.

The pound though fell 0.5 per cent to US$1.3536.

On the week, it was up 1 per cent. REUTERS