Dollar rallied in American trade on Friday to two-month highs against a basket of major rivals following hot US labor data, which underlined the strength of the jobs market.
Such data slashed the odds of a US interest rate cut in March and hurt such odds in May as well.
The Index
The dollar index rose 0.8% to 103.86, the highest since December 13, with a session-low at 102.90.
The index lost 0.5% on Thursday, the largest loss since December 27 as US yields tumble.
Hot US Labor Sector
Earlier US data showed the economy added a surprising 353 thousand new jobs in January, the best since January 2023, beating estimates of 187 thousand by a wide margin.
The unemployment rate stabilized at 3.7%, below estimates of 3.8%, while average hourly earnings rose 0.6% in January, beating estimates of 0.3%.
Such hot data showcases the tight conditions in the US labor sector, and will likely force the Fed to maintain high interest rates for most of 2024.
Indeed, following the data, the odds of a 0.25% Fed rate cut in March fell sharply from 35% to 17.5%, while the odds for such a cut in May fell from 93% to 71%.
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