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Stocks, dollar rise after strong US jobs report

Posted August 4

— World stock markets and the dollar were mostly higher on Friday after a key U.S. jobs report suggested hiring in the world's largest economy continued at a robust pace.

KEEPING SCORE: Germany's DAX was up 0.2 percent at 12,178 and France's CAC 40 was 0.4 percent higher at 5,150. Britain's FTSE 100 gained 0.1 percent to 7,484. Wall Street was poised to open higher. Dow futures rose 0.3 percent while the broader S&P 500 futures gained 0.2 percent.

JOBS REPORT: U.S. employers added 209,000 jobs in July, a second straight month of robust gains that underscore the economy's vitality as it enters a ninth year of expansion. The figure was above market forecasts for a gain of about 180,000. The unemployment rate slipped to 4.3 percent, matching a 16-year low first reached in May. The report is likely to boost investors' expectations of interest rate increases from the Federal Reserve. That was obvious in the rise in the dollar, which tends to rise on expectations of higher interest rates.

ANALYST TAKE: Valeria Bednarik, analyst at FXStreet.com, said "the news confirms a healthy employment sector." She noted, however, that the gains in wages remain contained, which could limit the Fed's concerns about inflation.

CURRENCIES: The dollar was up 0.6 percent against the Japanese yen, while the euro was down 0.2 percent against the U.S. currency, at $1.1843.

IN THE MONEY: The latest earnings from big companies added to the strong run of corporate results in the current reporting season. Japanese auto making giant Toyota Motor Corp. posted an 11 percent rise in quarterly profits on improved sales around the globe, it said after the close of trading. In Europe, the Royal Bank of Scotland swung to a 680 million pound ($894 million) quarterly profit after losing more than 1 billion pounds a year ago.

U.S. PROBE: Special Counsel Robert Mueller's decision to use a grand jury in an investigation into potential collusion between the Trump campaign and Russia was the latest headline-grabbing news. The use of a grand jury suggests that Mueller and his team will likely hear from witnesses and demand documents in coming weeks. While the move doesn't suggest any criminal charges are near or will necessarily be sought, the investigation is widely seen as a distraction and is not good news for markets.

ASIA'S DAY: Japan's Nikkei 225 fell 0.4 percent to close at 19,952.33 while South Korea's Kospi added 0.4 percent to 2,395.45. Hong Kong's Hang Seng index edged up 0.1 percent to 27,562.68 but the Shanghai Composite Index shed 0.3 percent to 3,262.08. Australia's S&P/ASX 200 slipped 0.3 percent to 5,720.60. Benchmarks in Singapore and Indonesia fell but markets in Taiwan and other Southeast Asian countries advanced.

OIL: Benchmark U.S. crude lost 10 cents to $48.93 per barrel in electronic trading on New York Mercantile Exchange. The contract dipped 56 cents to close at $49.03 a barrel on Thursday. Brent crude, the international standard, dropped 12 cents to $51.89 per barrel in London. It fell 35 cents on Thursday.

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