Forex Europe Review – US Non farm payroll shows no new jobs, dollar falls

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EURUSD opened the European session at 1.4250 and declined to 1.4208 early in the session on rumours that talks between the Greek government and a troika comprising the EU, IMF and ECB were put on hold when Greece refused to consider new austerity measures to reduce the budget deficit equivalent to 1 percent of its GDP. However, a further decline in Euro was halted closer to the U.S. Non farm payroll report as dollar weakened in expectations of fewer jobs created. After the report showed worse than expected results, with absolutely no new job creation, dollar tumbled and euro was briefly boosted to 1.4277.

 

GBPUSD steadily climbed throughout the European session moving well off yesterday’s three week low as investors took the opportunity for profit taking on long positions in order to adjust positions before the U.S. non farm payroll report. Early in the session UK construction PMI data registered 52.6 in August which was in line with expectations which helped support Sterling since the index was above the 50 line meaning still in the expansion zone. After the Non farm payroll data, Sterling surged against the dollar to hit a high of 1.6251. Cable opened at 1.6182.

 

The Swiss franc strengthened against most of its major counterparts for a third day ahead of U.S. non farm payrolls report which was expected to job growth in the U.S. slowed last month, spurring demand for the perceived safety of the Swiss currency. Immediately after the report showed there was no new jobs added despite expectations for a drop to 75,000 from a revised 85,000 in June, the Swiss franc surged against both euro and dollar. USDCHF fell, hitting a three week low of 0.7709 within a minute from 0.7795. EURCHF touched down to 1.0999 from 1.1131.

 

USDJPY opened the session at 76.83 and steadily edged down in anticipation of a weak U.S. jobs report. After the data was released, dollar tumbled, accelerating USDJPY decline to 76.63, as investors dumped dollar for the safe haven yen.

 

Gold opened Europe at $1,828.38 and gained over $50 a troy ounce to peak at $1,880.93 after the U.S. jobs report showed companies did not add any workers in August. Dollar tumbled. Also, due to the data speculation rose that the Fed will take measures to stimulate the economy, and this could weaken dollar further. Gold and dollar have an inverse relationship.