The dollar rallied sharply against major currencies after the U.S. Labor Department reported stronger-than-expected job growth for October. The report showed that the U.S. economy added 161,000 jobs, while the unemployment rate edged down to 4.9%.

The upbeat data has increased market confidence that the Federal Reserve will raise interest rates at its December meeting. Higher interest rates typically make the dollar more attractive to investors seeking higher yields.

“This jobs report was pretty solid and cements the case for a December rate hike,” said a currency strategist at a major bank. “We’re seeing the dollar react accordingly.”

The dollar index, which measures the greenback against a basket of six major currencies, rose 0.4% to 97.50, its highest level in nearly two weeks.

Key Takeaways:

• U.S. job growth exceeds expectations.
• Unemployment rate declines to 4.9%.
• Market anticipates Fed rate hike in December.
• Dollar index reaches two-week high.

Analysts will be closely watching upcoming economic data releases and Fed commentary for further clues about the timing and pace of future rate increases.