The dollar climbed to a more than four-year peak and global equity markets rose yesterday after data showed US employers stepped up hiring in September and the jobless rate fell to a six-year low, further signs of a relatively strong economy.
The strong dollar helped pushed gold below $1,200 an ounce for the first time this year after the Labour Department reported that US non-farm payrolls rose by 248,000 last month and the jobless rate fell two-tenths of a point to 5.9 per cent.
The report knocked the euro to a more than two-year low against the dollar. The dollar hit a 15-month high against the Swiss franc, and the dollar index, which measures the greenback against six major currencies, headed towards its biggest yearly gain in nine years, up eight per cent so far in 2014.
Stocks on Wall Street rose more than 1 per cent, and European shares finished with a gain just under that level.
The dollar index hit a high of 86.746, its strongest level since June 2010, and was last up 1.29 per cent at 86.701.
Against the yen, the greenback jumped 1.30 per cent to 109.82 yen, while the euro slid 1.29 per cent to $1.2508.
MSCI’s all-country world index of stock performance in 45 countries rose 0.49 per cent. The FTSEurofirst 300 index of top European shares closed up 0.9 per cent at 1,347.14. Shares of European airlines rallied as the price of oil dropped, and exporters such as Airbus got a lift from the euro’s renewed slide.
On Wall Street, the Dow Jones industrial average rose 202.15 points, or 1.2 per cent, to 17,003.2.
The S&P 500 gained 22.66 points, or 1.16 per cent, to 1,968.83, and the Nasdaq Composite added 52.71 points, or 1.19 per cent, to 4,482.91. Healthcare and financial names led the gains on Wall Street.
German Bund yields rose a day after the European Central Bank showed little willingness to stimulate the economy through the purchase of sovereign debt. Markets could be in for a rough fourth quarter as investors anticipate tighter Fed monetary policy and if the ECB stands pat.
Bund yields rose two basis points to 0.93 per cent. Treasuries prices fell. The 10-year Treasury note fell 7/32 in price to yield 2.4628 per cent.
Brent crude oil futures fell below $92 a barrel at one point, down for a fourth consecutive day in a slide that has pushed prices to their lowest levels since 2012. Abundant supplies and a strong dollar continue to weigh on the market.
Brent for November delivery was down $1.30 at $92.12 a barrel. US November crude slipped 94 cents to $90.07.