The US dollar recorded its strongest single-day gain in nearly five months on Friday, after a much better than expected American jobs report convinced traders that the Federal Reserve is likely to raise interest rates again in December.

The dollar index, which tracks the greenback against a basket of major currencies, rose 0.77 per cent to 102.26. That put it on course for its biggest daily percentage gain since 17 June, while the euro fell 0.67 per cent to $1.11437, heading for its largest one-day drop since 1 October.

The trigger was the October employment report from the US Labor Department. Employers added 165,000 jobs last month, far above the 65,000 gain economists polled by Reuters had expected, and the unemployment rate dipped to 4.1 per cent from 4.2 per cent in September. Earlier months were also revised higher, with September's gain lifted to 60,000.

Strong hiring gives the Fed room to keep raising rates, and traders responded at once. Market expectations for an increase of at least 25 basis points at the central bank's December meeting moved back up towards 80 per cent, according to the CME FedWatch Tool, from roughly 67 per cent the day before.

Bond yields climbed alongside the currency. The two-year Treasury yield rose about 6 basis points to 4.52 per cent, while the 10-year yield gained around 3 basis points to 4.87 per cent.

For the week, the dollar was up 0.3 per cent, while the euro shed 0.1 per cent and was on track for a third straight weekly decline. The jump also reversed a slide earlier in the week, when the dollar had touched a one-month low in the wake of the midterm election results.

[Source: devdiscourse.com](https://www.devdiscourse.com/article/international/4002979-forex-dollar-jumps-after-strong-us-payrolls-report?amp) | [Source: gainlynx.com](https://gainlynx.com/us-dollar-surges-strong-jobs-report/)