U.S. Adds 165,000 Jobs as Dollar Posts Its Biggest Gain Since June

The U.S. added 165,000 jobs in October, well above expectations of 65,000, and unemployment fell to 4.1%. The payroll gain exceeded the estimate by 100,000. The stronger report coincided with a sharp advance in the dollar and a rise in market expectations for a December Federal Reserve rate increase.

The dollar index gained 0.71% to 102.31, its largest one-day increase since June 17. The euro fell 0.72% against the dollar, the British pound declined 0.74% and the yen lost 0.5%.

U.S. Treasury yields also moved higher, with the 10-year yield at 4.85% and the two-year at 4.52%. Markets put the probability of a 25-basis-point Fed rate hike in December near 80%.

Federal Reserve officials Williams, Musalem and Daly stressed that inflation pressures remain. Daly said the central bank may still need to raise rates further. For crypto markets, the data put the dollar’s strength and the U.S. rate outlook in focus as part of the broader market backdrop.