Euro gained against the dollar most of the European trading session on increased risk appetite, buoyed before U.S. jobs data and also because Germany and France promise to push for closer fiscal union in the euro zone. In a speech to the German parliament, German Chancellor Angela Merkel vowed to fight for the euro. Talk of a possible reinforcement from the IMF in the amount of 200 billion euros will help ease the debt crisis. EURUSD rose 0.6 percent to 1.3536 from 1.3461 ahead of the US non farm payroll data then pared gains. After a brief spike to 1.3547, the pair eased down to 1.3485 as the dollar strengthened after the positive data.
The dollar slid against all its 16 major counterparts prior to the Non farm payroll report as investors sought higher-yielding assets due to the upbeat mood, thus diminishing the greenback’s safe-haven appeal. After the Non farm payroll report, the dollar pared losses as the US economy added 120,000 jobs in November and the unemployment rate fell to 8.6 percent from 9.0 percent. The NFP number though was slightly short of expectations of 122,000 jobs.
The Canadian dollar weakened after a dismal domestic jobs report that widely missed expectations. Canada’s economy lost a net 18,600 jobs in November from the month before, and the unemployment rate rose to 7.4%, from 7.3% the month before. It was Canada’s first back-to-back monthly jobs loss since the recession. Prior to the data, the loonie had been gaining against the greenback due to the broadly upbeat sentiment in the markets today. USDCAD had fallen to a European session low of 1.0078 from 1.0078. However after the poor Canadian jobs data, coupled with the positive US jobs report, the US dollar gained, pushing USDCAD to a high of 1.0149.
Sterling was up 0.3 percent against the dollar on risk appetite. GBPUSD opened Europe at 1.5674 and climbed to 1.5725. US jobs data end of the session boosted dollar, bring cable to close at 1.5695.
USDJPY opened the session at 77.77 and rose to 78.00. After the US jobs data, dollar’s knee jerk reaction made it spike to 78.01 then down to 77.76.