Investing.com – The dollar surged against a basket of global currencies on Friday, buoyed by data showing the U.S. economy created more jobs than expected while an update from the Trump administration on tax-reform lifted sentiment.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.86% to 93.50.
The dollar was on track to record its biggest one-day gain of the year so far, after a strong U.S nonfarm payrolls report eased concerns about a possible slowdown in the economy.
The U.S. economy created 209,000 jobs in July, handily beating the consensus estimate for the creation of 183,000 jobs.
As was widely expected the jobless rate remained unchanged at 4.3% while average hourly earnings met expectations, rising 0.3% from the prior month.
The increase in wages is being closely monitored by the Federal Reserve for evidence of continuing strength in the labor market and upward pressure on inflation.
Also adding to positive sentiment on the greenback, were comments from National Economic Council director Gary Cohn that the U.S. administration is working on a tax plan that would bring corporate profits back to United States.
"We're working toward real tax reform as well as major tax reduction in the United States," Cohn said.
The rise in the dollar weighed heavily on sterling and euro, as both currencies gave back recent gains against the greenback.
GBP/USD fell by 0.76% to $1.3039, a day after the Bank of England left interest rates unchanged.
EUR/USD lost 0.97% to $1.1754 while EUR/GBP fell to 0.9017, down 0.19%.
USD/CAD rose 0.53% to C$1.2647 while USD/JPY jumped 0.70% to Y110.80.