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By Bloomberg

The dollar gained after payrolls data bolstered speculation America’s economy was strong enough to withstand higher rates as soon as next month. European stocks pared declines and U.S. equity-index futures fluctuated.

The dollar gained against all but two of its 16 major peers, strengthened 0.5 percent to $1.0873 per euro at 9:02 a.m. in New York. The Stoxx Europe 600 Index dropped 0.2 percent and futures on the Standard & Poor’s 500 Index added less than 0.1 percent. The yield on the 10-year Treasury note was little changed at 2.23 percent. Malaysia’s ringgit and Russia’s ruble led developing-nation currencies lower. Chinese stocks rebounded on bets the government will take steps to support the market.

Employers added 215,000 jobs in July and the unemployment rate held at a seven-year low of 5.3 percent, signs of further progress in the U.S. labor market. The impending Federal Reserve move spurred a selloff in emerging markets that’s been exacerbated by a rout in commodities. Industrial metals slumped to multiyear lows on signs of a slowdown in China, compounded by Friday’s unexpected drop in German industrial production.

“If anything, the report slants the bias towards a September rate hike, given the strength of the jobs numbers,” Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles, said by phone. “I’m not surprised to see the market down given the downward bias we’ve seen the last couple of days.”

The gain in payrolls last month followed a 231,000 advance in June that was bigger than previously estimated, a Labor Department report showed Friday in Washington. While the data also showed a pickup in hours worked, average hourly earnings climbed a less-than-forecast 2.1 percent from a year earlier, indicating little momentum in wage growth.

The Bloomberg Dollar Spot Index rose 0.2 percent while a Bloomberg gauge of 20 emerging-market currencies fell 0.3 percent, heading for its seventh weekly loss in the longest slump since October. Russia’s ruble and Brazil’s real led declines this week, falling more than 3 percent.

Malaysia’s foreign-exchange reserves dropped below $100 billion for the first time since 2010 after the ringgit slid 18 percent in the past 12 months amid a slump in oil.

The MSCI Emerging Markets Index of stocks erased earlier gaings, leaving its third weekly decline at 1.9 percent.

Two shares fell for every one that advanced in the Stoxx 600, paring the gauge’s weekly gain to 0.7 percent. Futures on the Standard & Poor’s 500 Index were little changed after the index fell the most in almost two weeks on Thursday.

Traders are pricing in a 48 percent probability that the Fed will raise rates in September, based on the assumption that the effective federal funds rate will average 0.375 percent following the increase, data compiled by Bloomberg show.

Emerging Markets

Copper dropped as much as 1.2 percent to $5,121 a metric ton, the lowest since July 2009 after the German data. Aluminum fell as much as 0.6 percent, heading for its worst run of weekly losses since January.

Oil headed for its sixth weekly decline amid signs of a persistent supply surplus. U.S. crude inventories remain more than 90 million barrels above the five-year seasonal average, while output expanded last week by the most since May, government data show.

Brent slipped 0.6 percent to $49.22 a barrel, down 5.7 percent for the week. West Texas Intermediate was little changed at $44.61, leaving it 5.4 percent lower in the period.

RBA Signals

The Aussie dollar rose against all of its major counterparts, and was also on course to be the week’s best performer, as central bank Governor Glenn Stevens signaled he’s done his part in weakening the currency and more impetus may now come from the Fed.

Stevens sparked the biggest intraday surge in more than two months Tuesday by refraining from saying the Aussie is overvalued for the first time in 18 months. It climbed another 0.5 percent to 73.83 U.S. cents Friday after the central bank indicated unemployment had peaked.