Dollar jumps on October U.S. jobs surge

NEW YORK (MarketWatch) — The U.S. dollar jumped Friday after the U.S. created twice as many jobs in October than Wall Street had expected, sparking yet another round of discussion about when the Federal Reserve could slow its bond buys.

Bloomberg

The U.S. added 204,000 jobs last month, the Labor Department said Friday, and hiring for September and August were revised higher by 60,000 in total. But the unemployment rate inched up to 7.3% from 7.2%, which was likely due to the shutdown. Economists surveyed by MarketWatch expect October nonfarm payrolls to rise 100,000, with the unemployment rate ticking higher to 7.4% from 7.2%.

"This report comes as a pleasant surprise and to the extent that it corroborates the strength that has already been seen in other economic reports, it suggests that the risks has shifted more in favor of a January (versus a March) start to QE tapering - especially if this level of strength is sustained in the coming months," said Millan Mulraine, director of U.S. research and strategy at TD Securities.

Read: 'Dectaper' is back on the table.

The ICE dollar index (DXY) , which compares the U.S. currency with six top rivals, increased to 81.257 from 80.841 late Thursday in North America. The index, which is heavily skewed to the euro, was at 80.914 just before the report hit.

The WSJ Dollar Index (XX:BUXX)  , which uses a larger comparison basket, advanced to 73.41 from 72.99.

The euro (EURUSD)  fell to $1.3359 from $1.3417 late Thursday. A downgrade to France's credit rating by Standard & Poor's briefly weighed on the currency, which tumbled Thursday in the wake of a surprise interest-rate cut by the European Central Bank.

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The Australian dollar (AUDUSD)  took a hit early Friday in Asia after a statement from the Reserve Bank of Australia indicated another rate-cut was possible. But the currency later got a boost from Chinese trade data showing strong rises in both exports and imports in October.

In recent trade, the Aussie bought 93.84 U.S. cents, down from late Thursday's 94.45 U.S. cents

The British pound (GBPUSD)  fell to $1.6012 from $1.6076, while the dollar (USDJPY)  jumped to ¥98.74 from ¥97.96 late Thursday.