The euro strengthened against its lower-yielding counterparts on Friday in New York as some encouraging economic data fueled risk appetite. The single currency added to multi-week highs against the dollar and yen and also rebounded versus the pound.
The euro continued its upward move against the U.S. dollar and extended its highest level in more than a month to 1.3516. The European currency has been trending higher for about two weeks.
According a U.S. Department of Labor report, non-farm payroll employment fell by 539,000 jobs in April following a revised decrease of 699,000 jobs in March. Economists had expected a decrease of about 600,000 jobs compared to the decrease of 663,000 originally reported for the previous month.
At the same time, the Labor Department said that the unemployment rate rose to 8.9 percent in April from 8.5 percent in March. The increase, which lifted the unemployment rate to a new 25-year high, came in line with economist estimates.
The euro rallied to a 3 1/2 week high of 134.00 against the Japanese yen. The single currency has been trending higher for nearly two weeks.
Earlier in the day, the Bank of Japan board members predicted that the Japanese economy is likely to continue to deteriorate through the end of 2009, minutes from the April 6 and 7 monetary policy meeting revealed.
The euro also gained against the British pound, moving to a weekly high of 0.8970. With the rally, the euro climbed away from yesterday's 2 1/2-month low of 0.8763.
The Office for National Statistics said today that UK's output price inflation slowed to 1.2% in April, marking the lowest rate since April 2004. Economists had expected factory gate inflation to ease to 0.7% from March's 2%. Core output price inflation also eased in April to 2.4% from 3.2% in the previous month.
In economic news from the Eurozone, Germany's Federal Statistical Office announced today that the trade surplus stood at EUR 11.3 billion in March, up from EUR 8.6 billion in February. Economists had predicted a surplus of EUR 8 billion. A year ago, the trade surplus was EUR 16.8 billion.
Exports dropped 15.8% year-on-year to EUR 70.3 billion in March, while imports declined 11.6% to EUR 59 billion. On a monthly basis, exports and imports rose a seasonally and calendar adjusted 0.7% and 0.8%, respectively.
Data released by Germany's Federal Ministry of Economics and Technology revealed that industrial output remained flat month-on-month in March, following a revised 3.4% fall in February. Industrial output also fared better than economists' expectations of a 1.3% decline in March.
Yesterday, the European Central Bank said it plans to spend about 60 billion euro ($80 billion) buying covered bank bonds in a bid to stem the euro zone's economic decline. The ECB also cut its main interest rate to 1 percent, a record low.
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