Euro tumbles to fresh 2-year low after weak U.S. jobs report
The single currency tumbled to a fresh 2-year low versus the dollar on renewed risk aversion after U.S. employers added fewer jobs than expected in June.
The single currency traded sideways in quiet Asian session and briefly recovered to an intra-day high at 1.2401 in European morning before stabilising ahead of the crucial U.S. jobs report. Euro began its intra-day decline after U.S. employers added fewer jobs in June than market forecast and penetrated June's 1.2288 low to a fresh 2-year low at 1.2260 in New York afternoon on increased risk aversion.
U.S. non-farm payrolls came in at 80k which were lower than street forecasts of 90k. U.S. unemployment remained unchanged at 8.2% whilst private payrolls came in at 48K, compared to expectations of 100k.
Although the British pound retreated to 1.5506 in early European morning, price rose to session high at 1.5551 ahead of the release of U.S. non-farm payrolls. Cable also dropped in tandem with euro after the U.S. jobs report and tumbled to an intra-day low at 1.5461 at New York midday before rebounding to 1.5489 near New York closing.
Versus the Japanese yen, the greenback weakened to 79.80 in early European morning before recovering to 79.93 before the release of U.S. data. Price fell sharply to an intra-day low at 79.50 afrter release, however, dollar rebounded to 79.72 in New York afternoon before stabilising.
In other news, Greek PM Antonis Samaras said 'the fiscal programme has missed its targets; gov't wants to secure Greece's place in the euro; main goal is to reverse recession; we are determined to push reforms because they are necessary; don't want to renegotiate our targets but what is stopping us fm reaching them; we must replace measures responsible for job losses.'
On the data front, Germany industrial production m/m n y/y were better-than-expected at 1.6% and 0.0%, vs forecasts of 0.1% and -1.2% respectively.
Data to be released next week :
Japan current account, machinery orders, economic watch, China CPI, PPI, Swiss jobless rate, Germany trade balance, exports, imports and EU sentix. index on Monday.
UK retail sales, house prices, industrial production, manufacturing production, trade balance and Canada housing starts on Tuesday.
Japan domestic CGPI, Germany CPI, HICP, WPI, Canada trade balance, exports, imports, US trade balance and wholesale inventories on Wednesday.
EU industrial production, US jobless claims, exports, imports and Fed Budget on Thursday.
Swiss PPI, U.S. PPI, core PPI and U. Michigan consumer sentiment on Friday.