©Reuters. File image of an employee checking dollar bills at a bank in Hanoi, Vietnam. August 12, 2015. REUTERS/Kham
By Caroline Valetkevitch
NEW YORK, Aug 5 (Reuters) – The dollar rallied across the board on Friday after a stronger-than-expected U.S. jobs report for July suggested the Federal Reserve may need to continue raising short-term interest rates. .
* The , which measures the dollar against a basket of currencies, broadened gains sharply after the report showed nonfarm payrolls rose by 528,000 jobs last month, the biggest gain since February. That was well above economists’ expectations.
* The index, which remains below its peak in mid-July, was up 0.8% at 106.57 and was up just 0.2% just before the report.
* “This is a much stronger report than expected… What it means is that the Fed can’t pivot at this point. The Fed has to continue to raise rates. People who say take it more calmly they are being crowded out with this report,” said Axel Merk, president and chief investment officer of Merk Investment in Palo Alto, California.
* Against the yen, the dollar was up 1.5% at 134.99 yen.
* The Fed last week raised its benchmark rate by three-quarters of a percentage point. It has raised that rate by 225 basis points since March, but investors had recently been gauging whether it could be less aggressive on hikes going forward.
* The dollar index accumulates a gain of more than 11% so far this year amid the prospect of further increases in the cost of credit.
* Meanwhile, the British pound fell 0.8% against the dollar to $1.2066, a day after the Bank of England decreed the biggest rate hike in 27 years to fight rising inflation, but warned that a long recession was looming, which would begin in the fourth quarter of this year.
* The euro, meanwhile, lost 0.7% to $1.0178.
(Reporting by Caroline Valetkevitch, Additional reporting by Samuel Indyk in London and Rae Wee in Singapore, Editing in Spanish by Manuel Farías)
