Forex Market Review – Aussie weakens on disappointing jobs data; euro extends gains

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Euro extended gains into the Asian trading session, reaching a high of 1.2877 against the dollar. This was the highest level in two weeks. Market sentiment was still “risk on” as regional markets reacted to the news of the IMF raising another $500 billion in potential bailout funds. There is also optimism for a deal on Greek debt to be reached by the weekend. The focus today  turns to first post-S&P downgrade debt auctions in Spain and France.


Against the Japanese yen, the single currency was at 98.71 yen from 98.86. Meanwhile, the dollar was still weaker against the yen, with USDJPY 76.75 from 76.84.


The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at 80.505 from 80.486.


The Australian dollar slid slightly in Asia trading Thursday, hit by a weak reading on the country’s labor force.  The aussie surrendered some of their recent gains against the dollar. AUDUSD peaked at 1.0436 by late Wednesday trading, boosted by the IMF news, but soon fell to 1.0377 on the disappointing jobs data showing a surprising drop in employment by 29,300 in December.  Expectations were for an additional 6,000 jobs.

Even though the country’s unemployment rate held steady at 5.2 percent, the drop in employment change could prompt the Reserve Bank of Australia to cut interest rates at its next policy meeting.