US Dollar Surges on Strong Jobs Report, but Rate Hike Chances Still Uncertain

The US Dollar's strength in response to strong US Nonfarm Payrolls data was short-lived as it gave back some of its gains, but remains positive overall. The jobs report showed a gain of 162K in August, beating expectations of a 56K increase.

July's reading was revised sharply higher to a gain of 21K from the previously reported 23K decline, while June payrolls were revised to 31K from 20K. The Unemployment Rate held steady at 4.1%, as expected.

The strong employment figures have lifted expectations of a Federal Reserve rate hike at the September 15-16 meeting. According to the CME FedWatch Tool, markets now see around a 60% chance of a 25-basis-point increase, up from roughly 50% before the NFP release.