After the release of the data, interest rate futures traders bet on a 52 percent of a rate hike in October. But some currency market players thought the figures increased the likelihood of a Fed hike in September.
"The market isn't pricing a high enough probability of September," said Aroop Chatterjee, currency strategist at Barclays in New York. "We think that pricing will have to change as this data is reflecting."
Pointing to data on compensation, Mike Meyer, vice president of EverBank World Markets in St. Louis, said "This higher wage growth definitely puts, in my opinion, a September rate hike back in play."
The dollar rose more than 1 percent against the euro, yen, and Swiss franc. The greenback hit 125.740 yen, its highest level in roughly 13 years. The euro turned sharply lower after rallying earlier this week.
The Fed's first interest rate hike is expected to boost the dollar by driving investment flows into the United States.
"The concerns on the dollar side have certainly diminished," Chatterjee said.
New York Fed President said in a speech Friday that an interest rate hike later this year appropriate.
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The euro was last down 0.74 percent against the dollar at $1.1146 after hitting a more than two-week high of $1.138000 on Thursday. The dollar was last up 0.95 percent against the yen at 125.63 yen. The dollar was last up 0.53 percent against the franc at 0.9401 franc.
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The dollar index, which measures the greenback against a basket of six major currencies, was up about 1 percent at 96.33.