Loading...

Thursday, August 16, 2012

Euro gains on dollar on back of impressive jobs data

Hello, Traders & Friends


The US dollar endured a difficult day in forex trading on Friday (August 03, 2012) compared to the euro – even on the back of impressive jobs growth in the country.



Forex investors decided to embrace risk as the euro enjoyed its largest single-day gain for a month as hopes began to expand that the region’s debt crisis could be contained.



Optimism grows



Optimism had been growing around the European single currency even prior to the US jobs data being released. That’s because the European Central Bank (ECB) had indicated that it would offer further support to both Italy and Spain during its meeting on Thursday.



Focus appears to have switched among forex investors from the fact that the ECB did not take any immediate action – to the fact that it has outlined a clear path that will allow it to make a forceful move in the future. The ECB has stated that it will make plans over the coming weeks with regards to outright purchases that could potentially stabilise the currency and the euro zone’s borrowing costs.



On Friday, Mario Rajoy, who is the Prime Minister in Spain, appeared to inch closer to requesting a bailout for his country but suggested that he needed to know what potential conditions would be attached to a bailout and what format a potential rescue would adopt.



Overall, the euro increased by 1.6 per cent to $1.2378 – marking its best efforts in forex trading since the end of June. In addition, the thirst for risk taking among forex investors saw the currency enjoy a fight back compared to the Japanese yen as it leapt by 2.1 per cent to stand at 97.24 yen.



Dollar concerns



Meanwhile, the US dollar enjoyed a rise of 0.4 per cent compared to the Japanese yen: reaching 78.54 yen.



During July, US employers hired the largest number of workers for a five month period: although the jobless rate in the country did increase to 8.3 per cent which meant that the prospect of increased stimulus being introduced by the Federal Reserve remains on the cards. It has sent a strong signal that if the recovery does not speed up it may introduce more stimulus soon.





Read other news articles:















No comments:

Post a Comment