NEW YORK- TheUS dollar was little changed against a basket of currencies following a choppy session that saw the greenback posting both gains and losses after data showed the world’s largest economy created more jobs than expected in June.
The report cemented expectations of another 75 basis-point hike at the Federal Reserve’s policy meeting later this month.
US nonfarm payrolls increased by 372,000 jobs last month, the Labor department reported on Friday. Economists polled by Reuters had forecast 268,000 jobs added last month.
Earlier in the session, the greenback hit a fresh two-decade high against a basket of currencies, led by gains against the euro amid signs the euro zone economy will tip into recession. The dollar has hit consecutive 20-year peaks this week, gaining in five of the last six weeks.
In afternoon trading, the dollar index was last flat at 106.96.
Fed funds futures priced in a more than 90 percent chance of a 75-bps rate hike this month, with about 187 bps of cumulative tightening by the end of the year. That was up from 181 bps late Thursday.
“Solid US data, in particular today’s stronger-than-expected payrolls, and continued hawkish rhetoric from FOMC (Federal Open Market Committee) officials reinforced the growing divergence between the increasingly bleak outlook in Europe and the more resilient U.S economy,” wrote Jonas Goltermann, senior markets economist, at Capital Economics.
That said, some economists pointed out that a deeper look at the jobs report showed that it was not as strong the headline suggested.
Bernard Baumohl, chief global economist, at The Economic Outlook Group, said in a report, that the data reveals “an economy that is already transitioning toward slower growth.”
