Euro slid to a two-week low against the dollar in volatile trading during the US session after a disappointing non-farm payrolls report. The most closely watched US jobs report printed less than the expected number of jobs added to the economy, just 115,000 in April versus the forecasted 170,000. The data further added to an already weak sentiment in Europe following soft euro zone services PMI numbers earlier today. April PMI came in at 46.9, sharply lower than 49.2 in March. Anything below 50 signifies contraction. EURUSD fell to 1.3079, during a volatile US session, down 0.5 percent on the day.
The focus now turns to weekend elections in Europe. Elections in Greece and France will provide a test of whether further austerity measures are popular or not.
Sterling continued its downtrend against the dollar, falling for a fifth day. GBPUSD touched a low of 1.6140, down 0.7 percent on the week.
USDJPY broke out of a steady range and fell after the NFP report, touching a low of 79.81, down almost half a percent on the day. The weak US jobs numbers now increases speculation that the Federal Reserve will introduce stimulus measures by expanding quantitative easing. This policy usually has a weakening effect on the dollar. EURJPY dropped to 104.44 from 105.54.
The Canadian dollar traded a very choppy session, see-sawing from a session high and low immediately after the NFP report. USDCAD fell to 0.9860 then shot up to 0.9962, the highest since April 23. Canada has strong trade relations with the United States and so a weak US economy will also affect Canada. Crude oil, a major Canadian export to the US, tumbled on the weak data, weighing down the commodity-price sensitive CAD.
Crude oil fell below US$100 a barrel for the first time since February. Price touched a low of $97.50, losing almost $5 on the day. The weak jobs report highlights a sluggish US economy, which would result in a lower demand for oil, hence lowering prices.