The dollar continued to surge higher versus other major rivals Friday, as a report showing robust U.S. jobs creation raised speculation the Federal Reserve will hike interest rates by next June.
The Fed has pledged to keep rates near zero for a “considerable time,” but with the U.S. employment rate finally slipping below the central bank’s 6 percent target, policy makers may no longer see the need to offer such extraordinary support for the economy.
The U.S. unemployment rate unexpectedly fell to 5.9 percent, its lowest level in over six years.
The report said non-farm payroll employment jumped by 248,000 jobs in September following an upwardly revised increase of 180,000 jobs in August.
Just as the Fed is seen tightening ahead of the schedule, traders expect the European Central Bank to eventually embark on full-scale quantitative easing.
Europe’s sluggish economy shows no sign of turning around, pushing the euro sharply lower of late.
The dollar rallied to $1.25 versus the euro, its highest in two years. Against the yen, the dollar rose 1.3% to Y109.87, a whisker from recent six-year highs.
The buck also extended its weekly gains against the sterling, rising near $1.6050.
It was the twelfth week in a row that the dollar index has risen, representing the greenback’s longest winning streak on record.