The euro rose in a volatile session against the dollar after a weaker-than-expected U.S. non-farm payrolls report raised the likelihood that the Federal Reserve will take steps to stimulate the economy. Stimulus measures through quantitative easing usually has a weakening effect on the dollar, which fell sharply after the disappointing U.S. jobs report showed only 69,000 jobs in May, much lower than the expected 150,000. It was the lowest number of jobs added since May last year, and the unemployment rate rose to 8.2 percent from 8.1 percent.
EURUSD which initially dipped to a 23-month low of 1.2287 later bounced above 1.24 and hit as high as 1.2457.
Sterling also gained against the dollar, with GBPUSD rising to 1.5436 and moving off a London session 4-1/2 low of 1.5267.
USDJPY initially tumbled after the disappointing U.S. jobs data, hitting a low of 77.65 but soon spiked up to 78.70 before steadying at pre-data levels around 78.05. There were market rumours that the spike up was a result of intervention by Japanese authorities to weaken the yen but the Japanese Ministry of Finance declined to comment. EURJPY also dipped to a new 11-year low of 95.57 before suddenly spiking back up to 97.50.
The Canadian dollar declined to the lowest level in more than six months versus its U.S. counterpart after Canada’s gross domestic product grew at a slower rate of 0.1 percent in March versus the expected 0.3 percent. USDCAD hit a high of 1.0441, the highest since November 2010. Also weighing on the loonie is weaker crude oil, which is a major Canadian export. Crude prices fell to a 7-month low of US$ 82.28.
Gold prices surged by over $80 just within the New York trading session, from a low of $1,544 to $1,629 as the dollar fell and investors fled to the safe have metal. Gold and the U.S. dollar usually have an inverse price relationship.