The dollar jumped to a 9-1/2 month high against the yen after the U.S. non farm payroll report that showed more jobs were created in February than forecast, showing signs that economic recovery was improving in the largest global economy. This led to speculation that the likelihood of further monetary stimulus from the Federal Reserve would be lower. After breaking key resistance levels at 82.00, USDJPY surged to 82.35 within minutes of the data from 81.76.
The non-farm payrolls report showed 227,000 jobs were added in February, beating expectations of 210,000. January’s number was revised up to 284,000 from 243,000. The unemployment rate remained stable, unchanged at 8.3 percent.
Broad dollar strength pushed up USDCHF to 0.9185 from a session low of 0.9101.
Sterling fell against the dollar after the non-farm payroll. The pound was weakened early in the session after the disclosure of weak industrial production data, which fell by more than expected to 0.4 percent in February. A 0.4 percent increase was forecast. GBPUSD fell to a session low of 1.5713 from 1.5797.
Euro extended losses against the dollar after the US jobs data. EURUSD fell to a session low of 1.3132, compared to Thursday’s high of 1.3290.
The single currency was already on the decline early on in the session , after the Greek government announced the results of its proposed debt restructuring plan. Although the number of private sector participants in the debt swap was broadly in line with expectations , Greek authorities said that this number falls short of the required rate of 90 percent in order to be able to receive the second bailout from international lenders. The Greek government said that they would have to activate collective action clauses (CAC’s) to force other creditors to participate, and boost the participation rate to 95.7 percent.
Attention turns to the ISDA (International Swaps and Derivatives Association) meeting today that will decide whether the activation of the collective action clauses would mean that Greece has suffered a “credit event”.