The U.S. currency recovered from its lowest level in two weeks on Friday. The U.S. dollar rose after data showed the world’s largest economy created far more jobs than expected, raising the chances of a larger Federal Reserve interest rate hike in March.
The dollar index which measures U.S. currency against a basket of currencies gained 0.3% to 95.597. The index added 0.3%, after falling to a two-week low of 95.136 earlier amid a resurgent euro.
Nevertheless, it was still down 1.7% on the week, on track for its largest weekly percentage decline since November 2020.
U.S. currency and the country’s economy
U.S. nonfarm payrolls rose by 467,000 jobs in January according to the Labor Department.
Furthermore, along with the big upside surprise for January, massive revisions sent previous months considerably higher.
Consequently, December which initially was reported as a gain of 199,000, rose 510,000. Also, November jumped to 647,000 from the previously reported 249,000. The revisions stated above came as part of the annual adjustments from the Bureau of Labor Statistics that saw significant changes for many of the months in 2021.
For the first month of the year, the biggest employment gains came in leisure and hospitality, which saw 151,000 hires, 108,000 of which came from bars and restaurants. In January, professional and business services contributed 86,000, while retail was up 61,000.
The single currency was still up on the day, rising 0.1% against the U.S. currency to $1.1455. The euro was up 1.7% on the week. It was on course for its best weekly performance since late March 2020, supported after a hawkish turn by the European Central Bank rippled through markets.
Earnings also jumped, accelerating 0.7%, good for a 12 month gain of 5.7% and providing confirmation that inflation continues to gather strength.
