WASHINGTONLONDON, Dec 8 Reuters The dollar rose on Friday after new data showed U.S. job growth accelerated in November and the unemployment rate dropped to 3.7, pointing to underlying strength in the labour market.

The U.S. dollar index was last up 0.43 at 104.13. The yen was 0.15 lower against the dollar at 144.425, after staging its biggest rally in almost a year the day before.

U.S. nonfarm payrolls added 199,000 jobs last month, the Labor Department39;s Bureau of Labor Statistics BLS said on Friday. Economists polled by Reuters had forecast 180,000 jobs created.

The employment report suggested that financial market expectations that the U.S. Federal Reserve could pivot to cutting rates as soon as the first quarter of 2024 were premature.

Traders of shortterm U.S. interestrate futures on Friday pared bets the Fed will start cutting interest rates in March after the report, and now see a May start to rate cuts more likely.

Markets had earlier priced in about a 60 chance of a March start to Fed rate cuts, but after the readout, pared that to just under 50.

In the short term, the U.S. rates market has just gotten I think way too dovish on the Fed, said Stephen Miran, cofounder of Amberwave Partners. The massive ease in financial conditions since the start of November basically means that the Fed doesn39;t need to cut to throw fuel on that fire.

YEN ENTHUSIASM

Although the yen was lower after the readout of the U.S. November jobs data, it surged by as much as…