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Reducing Fed Rate Cut Hopes After Solid Jobs Data Buoys Dollar

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The U.S. dollar spiked higher against its major counterparts in the European session on Friday, as a data showed that U.S. jobs growth accelerated more than forecast in June, tempering fears about weak labor market and possibility of an imminent rate cut by the Federal Reserve.

Data from the Labor Department showed that employment surged by 224,000 jobs in June after edging up by a downwardly revised 72,000 jobs in May. Economists expected employment to increase by about 160,000 jobs.

Despite the stronger than expected job growth, the unemployment rate inched up to 3.7 percent in June from 3.6 percent in May. The unemployment rate had been expected to hold steady.

The jobs data soothed concerns about weak labor market, after ADP data fell short of expectations in May.

Late last month, Fed Chair Jerome Powell indicated that risks to economic outlook had intensified and the bank would "act as appropriate to sustain the expansion."

Today's solid data is likely to reduce the odds for a rate cut at the meeting later this month.

The currency rose against its major counterparts in the Asian session, excepting the pound.

The greenback appreciated to more than a 2-week high of 1.2512 against the pound, up 0.6 percent from a low of 1.2588 seen at 2:15 am ET. The pair was worth 1.2576 when it closed deals on Thursday. Next key resistance for the greenback is seen around the 1.24 level.

Data from the Lloyds Bank subsidiary Halifax and IHS Markit showed that UK house prices declined for the first time in three months in June.

House prices decreased 0.3 percent month-on-month in June, reversing a 0.4 percent rise in May. Prices were forecast to fall 0.4 percent.

The greenback added 0.7 percent to a 4-day high of 108.51 against the yen, after having dropped to 107.76 at 5:00 pm ET. At Thursday's close, the pair was valued at 107.81. The greenback may test resistance around the 111.00 region, if it rallies again.

Preliminary data from the Cabinet Office showed that Japan's leading index eased to the lowest level in six-and-a-half years in May.

The leading index, which measures the future economic activity fell to 95.2 in May from 95.9 in April. The economists had expected a score of 95.3.

The greenback was up by 0.5 percent against the euro, touching a new 2-week high of 1.1226. The greenback had finished yesterday's trading at 1.1284 against the euro. Further uptrend may take the greenback to a resistance around the 1.10 level.

Figures from Destatis showed that Germany's factory orders declined more-than-expected in May.

Factory orders decreased 2.2 percent month-on-month in May, in contrast to a 0.4 percent rise in April. Economists had forecast a marginal fall of 0.1 percent.

The USD-CHF pair approached a new 2-week high of 0.9926, gaining 0.8 percent from a 2-day low of 0.9843 it set early in the Asian session. The pair was quoted at 0.9847 at yesterday's close. Continuation of the greenback's uptrend may see it challenging resistance around the 1.01 level.

After falling to 1.3044 at 5:45 pm ET, the greenback reversed direction to hit a 3-day high of 1.3129 against the loonie. The greenback had ended Thursday's trading at 1.3046 against the loonie. The currency is poised to face resistance around the 1.335 mark.

The greenback was 0.6 percent higher at a 3-day high of 0.6981 against the aussie, compared to Thursday's New York session close of 0.7021. The greenback is seen challenging resistance around the 0.66 level.

The greenback reached as high as 0.6623 against the kiwi, setting a 9-day high. This marked a 1 percent gain from yesterday's closing value of 0.6687. Should the currency rallies again, 0.64 is possibly seen as its next resistance level.

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