New York: A strong US jobs report sent the dollar surging to a fresh four-year high versus the euro Friday, almost breaching the $1.25 level per euro and closing toward 110 yen.
Underscoring the divergence between the sagging eurozone and Japanese economies and the strengthening US economy, the US jobless rate fell to a six-year low in September of 5.9 percent, on the back of a strong 248,000 net new jobs generated last month.
That compared with European Central Bank chief Mario Draghi`s expression of worries about more weakness in the eurozone on Thursday, as the ECB prepared to launch new asset purchases to fend off deflation.
Short-term Treasury yields jumped as the jobs data raised expectations that the Federal Reserve might accelerate plans to hike interest rates in the second half of next year.
Economist Harm Bandholz of UniCredit said he expects wage gains "are about to gain some momentum" and the Fed could also shift gears "faster than currently anticipated by most financial market participants."
But some cautioned that the data showed still-significant slack in the labor market -- including flat wages -- that could keep the Fed on its current cautious track toward tighter money.
Analysts mostly saw more upside for the greenback.
"As the Fed steps away from ultra-loose policies, the dollar should gain against the chief beneficiaries of those policies, namely emerging market and commodity currencies," said Societe General in a client note.
