Dollar Rises on US Labor Market Strength

The dollar index, DXY, experienced a rise of +0.20% on Friday, marking a positive trend following a stronger-than-anticipated US August payroll report. This report bolstered the likelihood of the Federal Reserve raising interest rates in 2023. The probability of a Federal Reserve rate hike at the September 15-16 Federal Open Market Committee (FOMC) meeting increased to 60% from 52% prior to the report.

The US August nonfarm payrolls surged by +162,000, exceeding expectations of +55,000 and representing the highest increase in five months. Furthermore, July payrolls were revised upward to reflect a +21,000 increase, surpassing the previously reported decline of -23,000. The August unemployment rate remained steady at 4.1%, aligning with expectations. Concurrently, gold prices declined on the robust US payroll report.