Investing.com – The U.S. dollar rose against its rivals on Friday following a blowout jobs report showing faster-than-expected wage growth, strengthening the Federal Reserve’s case to continue on its monetary policy tightening path.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.19% to 94.13, after falling to session low of 93.85.
Private payrolls grew by 223,000 for the May, a sharp uptick from the 163,000 in April, according to a report released Wednesday by ADP and Moody's Analytics. That beat economists’ forecast of 189,000.
The jobless rate fell to 3.8%, beating economists’ forecasts for an unchanged reading of 3.9%. Average hourly earnings grew 0.3% in May, topping expectations for 0.2% rise.
Analysts said the jobs report showed broad gains and the Fed would add a fourth rate hike to its projections at its September meeting.
“NFP gains were broad based. The Fed will hike four times this year, but the fourth dot likely won't appear in the forecasts until Sep,” Analysts at BMO said.
EUR/USD fell 0.22% but has steadied from a recent selloff as political turmoil in Italy abated after the country formed a government on Friday,.
GBP/USD rose 0.40% to $1.3351, while USD/CAD fell 0.21% to C$1.2955 amid expectations that the Bank of Canada could hike rates in July.
USD/JPY rose 0.60% as easing geopolitical uncertainty weighed on safe-haven yen.