USD rallies across majors as hot August payrolls revive Fed hike bets

The US dollar strengthened broadly on Friday after August non-farm payrolls came in above consensus at 162,000, jolting global markets and forcing an abrupt repricing of Federal Reserve expectations. Rate futures had cooled earlier in the week following dovish commentary from a Fed official, but the upside labour surprise pushed markets back toward pricing tighter-for-longer policy, lifting front-end Treasury yields and pressuring risk assets. EUR/USD and GBP/USD slipped as the yield differential widened in the dollar's favour, while USD/JPY firmed off the pivotal 155.00 support zone. Commodity currencies including AUD/USD and NZD/USD underperformed as equity futures turned lower and risk sentiment deteriorated. For the dollar index, near-term resistance sits at the week's highs, with support defined by the pre-payrolls consolidation range. Traders should note that a resilient labour market reduces the urgency for policy easing, keeping the dollar supported into upcoming CPI data. Positioning risk remains two-sided given conflicting signals from recent Fed rhetoric.