The dollar soared on Wednesday after US jobs, trade and services activity data beat expectations, bolstering the case for a Federal Reserve interest rate hike in December. The dollar rose to a more than three-month high against the euro and jumped to session highs against the yen and Swiss franc after data showing US private employers added 182,000 jobs in October. It added to gains following a report that found the US trade deficit narrowed sharply in September to its lowest in seven months.
The dollar index, which tracks the greenback against a basket of six major currencies, reached a 2-1/2 month high of 97.903 after US services activity jumped more than expected in October. A report from the Institute for Supply Management showed the services sector grew at a faster clip in October as employment, new orders, and business activity expanded. "The private sector continues to add jobs at a healthy pace, and I think it's likely strong enough that if this pace of job growth continues, it will be enough to justify a rate hike in December," said Omer Eisner, chief market analyst at Commonwealth Foreign Exchange in Washington. The euro fell nearly 1 percent against the dollar to $1.0863. The dollar gained more modestly against the yen and Swiss franc, rising 0.3 percent to 121.43 yen and 0.2 percent against the franc to 0.9918.
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