The dollar index (DXY00) rallied to a 1-week high today and finished up by +0.71%. The dollar jumped Friday on the stronger-than-expected US Oct payroll report, which showed payrolls and hourly earnings rose more than expected and the unemployment rate unexpectedly declined, hawkish factors for Fed policy. Also, the University of Michigan US Nov consumer sentiment index rose more than expected, a positive factor for the dollar. In addition, hawkish Fed comments on Friday boosted the dollar after New York Fed President Williams said that inflation is "absolutely too high," and San Francisco Fed President May Daly said, "My expectation is we're going to have to tighten monetary policy further."
US Oct nonfarm payrolls rose +165,000, stronger than expectations of +70,000 and the biggest increase in 7 months. Also, Sep nonfarm payrolls were revised upward to +60,000 from the previously reported +29,000. The Oct unemployment rate unexpectedly fell -0.1 to 4.1% versus expectations of no change at 4.2%.
