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FOREX-Dollar hits near 7-month high after U.S. jobs report
* Dollar rises to six-month high against euro
* U.S (Other OTC: UBGXF - news) . economy creates 271,000 jobs in October
* Dollar maintains U.S. jobs data surge increases
* Fifteen of 17 dealers see December Fed rate hike (Updates to late-afternoon U.S. trading, adds quote)
By Dion Rabouin
NEW YORK, Nov 6 (Reuters) - The dollar rose against other major currencies on Friday, maintaining gains that followed the release of data showing the U.S. economy created far more jobs than expected in October.
The surprisingly robust jobs report helped the dollar solidify a case for the Federal Reserve to increase U.S. overnight borrowing costs for the first time since 2006, a move that would strengthen the greenback and attract investors.
Nonfarm payrolls increased 271,000 last month, the largest rise since December and a far cry from the 142,000 and 136,000 jobs numbers seen in September and August. Market economists polled by Reuters had predicted 180,000 new jobs for October.
The data sent the dollar higher across the board. The greenback hit highs of 2-1/2-months versus the yen, seven months against the Swiss franc and 6-1/2 months against the euro.
The dollar index hit 99.345, the highest since mid-April (LSE: 0N69.L - news) , and was last up 1.3 percent at 99.167.
"Usually after nonfarm payrolls numbers you'll get an initial reaction and then you'll get some sort of pullback. And today we haven't really seen the pullback," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.
"I think that tells us that the market wasn't really positioned for a much stronger-than-expected number and the market expects that (dollar strengthening) is going to continue."
Traders are increasingly expecting the Fed to raise rates with interest rates futures now pricing a 70 percent probability that the U.S. central bank will raise borrowing costs next month, according to the CME Group (Kuala Lumpur: 7018.KL - news) 's FedWatch.
Barclays (LSE: BARC.L - news) , TD Bank and BNP (Paris: FR0000131104 - news) all changed their outlooks, predicting a rate hike in December rather than March, and 15 of 17 primary dealers, the banks that deal with the Fed directly, said they expect it to raise rates in December, according to a Reuters poll.
By comparison, in mid-September, after the Fed elected to keep rates unchanged, only 12 of 17 dealers expected an increase by the end of the year.
The euro fell to $1.0708, its lowest since April, and last traded down 1.3 percent at $1.0739.
The dollar climbed to 1.0068 Swiss francs, its strongest since mid-March. It (Other OTC: ITGL - news) was last up 1.1 percent at 1.0061 francs.
Against the yen, the dollar rose to 123.26 yen, its highest since Aug. 21, and last traded at 123.19, up 1.2 percent. The greenback was up 2.1 percent this week against the yen, its largest weekly gain against the Japanese currency since December. (Reporting by Gertrude Chavez-Dreyfuss and Dion Raboiun; Editing by Lisa Von Ahn and James Dalgleish)
