New York : The dollar rose broadly, hitting a fresh seven-month high against the yen yesterday, after government data showed the US economy created private sector jobs that were the highest in almost three years.
That report suggests that the US labour sector is on a gradual but steady recovery and should affirm expectations that the Federal Reserve would hike interest rates ahead of the European Central Bank, Bank of England and Bank of Japan.
The Labour department reported that 162,000 new jobs were added to the US economy, lower than market forecasts for a 190,000 gain, but private sector jobs rose to 123,000 to mark the largest since May 2007.
"It's a positive jobs report overall. The main take away is that we had more than 120,000 additional private sector jobs and that's a big deal because anything above 50,000 is good for the economy," said Jacob Oubina, senior currency strategist, at Forex.com in Bedminster, New Jersey. "This is positive for risk and we're seeing dollar/yen gain as a result."
The euro fell 0.5 per cent against the dollar to $1.3514. Traders said global macro hedge funds had sold euros following the jobs data.
Against the yen, the dollar rose as high as 94.54 yen, the highest since late August, according to Reuters data. It was last at 94.43 yen, up 0.6 per cent on the day. Dealers said there are options-related barriers near 95 yen, which is serving as strong resistance to the dollar/yen pair.
Sterling dropped 0.6 per cent to $1.5197.
