The Dollar Index at four year highs

The Non-Farm Payrolls report out of the United States has come out better than expected and the unemployment rate has fallen to six year lows, making the Dollar Index, which measures the strength of the greenback versus the six main currencies around the world, reach 4 year highs. The Euro has fallen to two year lows versus the Dollar and gold falls below the 1,200 dollars per ounce for the first time this year.

The US stock markets rallied on the news and the S&P 500 rose more than 1% and the European stocks rose almost 1%. It seems like now the US Federal Reserve has a stronger case to raise its interest rates sooner than most analysts expected. There is a higher probability now that interest rates will go up by the middle of next year.