Unemployment at lowest for seven years
Dollar surges as US rate rise looks certain
The dollar rocketed as US job growth surged in October, sending the unemployment rate to its lowest for more than seven years.
Nonfarm payrolls increased 271,000 last month, the largest rise since December 2014. The unemployment rate fell to its lowest level since April 2008, a level at which many Fed officials see as consistent with full employment.
Earlier this week Janet Yellen, chairman of the US Federal Reserve, told a Congressional committee that a rise in US interest rates in December was “a live possibility”.
David Lamb, head of dealing at the forex specialist, Fexco, said: “The US economy has just turned off gravity for the dollar. Such a stellar rate of job creation has sent the greenback into orbit.
“The prospect of the Fed raising interest rates in December is now on a par with turkey on Thanksgiving – all but certain.
“With a December rate hike now seemingly a done deal, huge inflows into the Dollar should drive it even higher in the coming weeks.”
Robert Craig, Private Client Investment Manager at MB Capital, said: “October’s non-farm payrolls number wasn’t great, it was gargantuan. If rates don’t go up on the back of this exceptional number, you suspect they never will.”