Forex News – Euro falls on caution ahead of EU Summit; dollar holds gains after NFP

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Euro declined against the dollar after the US Non-Farm Payroll report, falling from the key $1.35 level as investors preferred to be cautious ahead of the weekend because there are too many risk events next week. With a European Central Bank meeting and a European Union summit coming up, investors are wary of opening new positions on the euro. Euro has enjoyed a strong rally this week, gaining considerably versus the dollar and many believe the single currency had run its course and it was time to take profit. EURUSD reversed direction into the North American session on various market rumors, including one of a potential downgrade of Spain. EURUSD fell 185 pips to 1.3361 from the day high of 1.3547.


The switch in direction helped the greenback shrug off losses after the Non Farm Payroll report showed the U.S. economy added 120,000 jobs last month, up from 80,000 in October. Though slightly short of the forecast 122,000, the unemployment rate fell to 8.6 percent from 9.0 percent. The dollar index , which tracks the U.S. unit against a basket of six major currencies, turned up to 78.664, from 78.084 before the data and compared to 78.293 in North American trade late Thursday.


Sterling slid down 1 percent against the dollar to 1.5575 from 1.5725.


The dollar gained ground on the Japanese yen rising 0.4 percent. USDJPY peaked at 78.06 versus an early day low of 77.74.


The Canadian dollar fell sharply against the US dollar after data showed Canada lost 18,600 jobs in November, weaker than the 20,000 gain that was expected. The unemployment rate rose to 7.4% from 7.3% in October. The Canadian dollar broke a four-day winning streak against its U.S. counterpart as USDCAD rose 1.115 percent on the day to 1.0194 from the intraday low of 1.0078.