Euro tumbled to a two-year low against the dollar on Friday after the U.S. non-farm payrolls fell short of market expectations and caused a flight to safety. Also weighing on the euro were rising Spanish yields which soared again today to the risky 7 percent level as doubts grow that the EU’s plan could tackle its debt crisis. The single currency has given up all of its post- EU summit gains in the past three days, dropping nearly 3 percent. After the summit last Friday euro had neared $1.27. The euro was already under pressure since yesterday after the European Central Bank slashed the key interest rate by 25 basis points to 0.75 percent and brought the deposit rate to zero.
EURUSD extended losses into the U.S. session, accelerating its fall after the tepid U.S. jobs data to 1.2259, the lowest level since 27 June 2010. The nonfarm payrolls report showed 80,000 jobs were added in June, lower than the 100,000 average forecast. This kept the unemployment rate unchanged at 8.2 percent.
Euro plummeted to a near four-year low against the sterling, with EURGBP touching 0.7923, compared with the close of 0.7979 late Thursday.
GBPUSD fell to a 3-1/2 week low of 1.5459 from a high of 1.5548 as a result of risk aversion. Sterling has been under pressure since the Bank of England expanded QE yesterday.
Yen gained across most major counterparts as it is the preferred safe-haven currency for today. This sank USDJPY to 79.48 from 79.92 after the U.S. jobs report. EURJPY slid to a one-month low of 97.62 from where it was before the NFP report at 98.91.