EU Morning Report

US dollar recovers supported by solid Non-Farm Payrolls

  • The US dollar got a boost on Friday against a basket of currencies supported by solid US non-farm payrolls data. The data revealed that 244 thousand new jobs were created in April exceeding expectations for 186 thousand new jobs. The dollar jumped after the upbeat data, risk appetite recovered and world equities firmed as the US economy shows signs of strong recovery. The unemployment rate also surprised investors by rising to 9% higher than the 8.8% expected. Against the Swiss franc, the dollar jumped to 0.8798 from 0.8676 traded before the jobs data. 
  • The euro plummeted against the dollar on Friday weighed by the better than expected US employment data.The single currency extended its losses after a report saying that Greece was considering quitting the euro zone. On Friday ministers gathered at a special meeting but announced that the possibility of Greece exiting the euro zone does not exist. The euro was trading near the 1.50 level against the greenback last week but ECB President Jean-Claude Trichet's disappointing speech triggered a sell-off of the euro. The euro shed more than 4% sliding as low as 1.4309 from 1.4940 traded last week.  
  • Against the Japanese yen, the dollar rose supported by a heightened risk appetite in the market. The pair traded higher hitting 80.83 from a plunge to 79.56 last week.
  • The Australian dollar edged higher today extending gains for the second day against the dollar. Australia's central bank increased its forecast for the country's inflation signaling that interest rates may rise in the following months. The Aussie rose as high as 1.0779 dollars from a low at 1.0536 hit last week. Aussie's neighbor, the Kiwi, also jumped as high as 0.7972 on Friday from 0.7853.
  • Oil prices rose to 102.36 dollars a barrel on Friday from 94.68. Gold ticked higher recovering to 1504.60 dollars an ounce from 1462.05. Silver also edged higher climbing to 36.42 dollars an ounce from 33.06.  

Currency to watch out for: EURUSD & USDJPY  

  • § The EURUSD pivot point is at 1.4660 with a preference to enter Short positions at 1.4660
  • § The USDJPY pivot point is at 80.90 with a preference to enter Short positions at 80.80              

Today's calendar and market movers:

  • § Europe Sentix Investor Confidence in May is forecasted to fall to 12
  • § Canada Housing Starts in April is forecasted to fall to 185k 

Equity Markets:                                               

US equities were positive on Friday with the S&P500 trading up 0.38% and the DJIA up 0.43%. The European bourses were also positive with the FTSE trading up 0.96%, the DAX up 1.56% and the CAC up 1.33%. The NIKKEI and the HSI at the time of writing are trading down -0.63% and up 0.92% respectively.

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