Investing.com - The dollar rallied against the euro and the yen on Friday after a robust U.S. employment report reinforced expectations for a mid-year rate hike by the Federal Reserve.
The Labor Department reported that the U.S. economy added 257,000 jobs in January, far more than the 234,000 forecast by economists. December’s figure was revised to 329,000 from a previously reported 252,000.
While the unemployment rate ticked up to 5.7% last month from December’s 5.6% hourly earnings and the participation rate both saw increases in January.
The upbeat jobs report was seen as strong enough to indicate that the Fed will remain on track to start raising rates from near zero levels as early as June.
EUR/USD was at 1.1316 in late trade, down 1.14% for the day. USD/JPY jumped 1.35% to 119.12 late Friday, the highest level since January 12.
The euro remained under pressure as concerns over Greek debt negotiations continued to weigh on market sentiment.
Standard and Poor’s downgraded Greece to B- from B late Friday, one notch above default, and kept the outlook at "negative", indicating that further ratings cuts are possible.
In other trade, the Canadian dollar weakened as the stronger-than-expected U.S. jobs report overshadowed better-than-forecast Canadian employment growth.
Statistics Canada reported that the economy added 35,400 jobs in January, well ahead of forecasts of 5,000, while the unemployment rate fell to 6.6% from 6.7% in December.
USD/CAD was at 1.2526 in late trade, 0.75% higher for the day.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 1.26% to 94.84.
In the week ahead, the euro zone is to release what will be closely watched data on fourth quarter economic growth on Friday. Investors will also be focusing on Thursday’s inflation report from the Bank of England and Friday’s U.S. consumer sentiment data.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 9
Japan is to publish data on its current account.
In the euro zone, Germany is to release data on the trade balance.
Tuesday, February 10
Japan is to release data on tertiary industry activity.
Australia is to publish private sector data on business confidence as well as official data on house price inflation.
China is to report on consumer and producer price inflation.
In the euro zone, France is to release data on industrial production.
Elsewhere, in Europe, Switzerland is to produce data on consumer inflation, while the U.K. is to release data on industrial and manufacturing production.
Wednesday, February 11
Markets in Japan are to remain closed for a national holiday.
Australia is to release private sector data on consumer sentiment and official data on home loans.
In the euro zone, the euro group of finance ministers is to meet in Brussels.
Thursday, February 12
Japan is to release data on core machinery orders.
Australia is to release data on the change in the number of people employed and the unemployment rate, in addition to private sector data on inflation expectations.
The Bank of England is to publish its quarterly inflation report. BoE Governor Mark Carney is to hold a press conference to discuss the report.
Later in the day, Canada is to publish a report on new house price inflation.
The U.S. is to release reports on retail sales and initial jobless claims.
Friday, February 13
The euro zone is to release preliminary data on economic growth.
Switzerland is to produce data on producer price inflation.
Canada is to release data on manufacturing sales.
The U.S. is to round up the week with preliminary data on consumer sentiment.