The euro depreciated vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.3485 level and was capped around the $1.3590 level. Some traders took advantage of very thin global liquidity to push the U.S. dollar higher following a decent U.S. March non-farm payrolls report that saw headline non-farm payrolls increase 162,000, up from an upwardly-revised -14,000 in February. The unemployment rate remained at 9.7% and this is a positive sign because it means more people are returning to the labour force seeking full-time employment. There were positive revisions to the payrolls data for the first two months of the year and average hours worked increased to 34.0 from the revised prior reading of 33.9. Private jobs growth registered 123,000 with manufacturing payrolls up 17,000. Average hourly earnings were up less-than-expected at -0.1% m/m and +1.8% y/y, signaling workers do not yet have pricing power with regard to wages. On the whole, today's labour report indicates the U.S. economy is on the mend but jobs growth is likely to remain muted and the jobless recovery is likely to continue. The dollar also moved higher on a report that the Federal Reserve will be meeting on Monday to discuss a possible increase in the discount rate - another sign of monetary tightening. The greenback is gaining ground on the premise that U.S. interest rates will normalize at a faster pace than eurozone interest rates. February pending home sales data and ISM data will be released on Monday. In eurozone news, traders await the release of the EMU-16 April Sentix investor confidence number on Tuesday. Data released in the eurozone this week saw German March PMI improve to 60.2 while EMU-16 PMI improved to 56.6. Liquidity is expected to remain quite thin through Monday in the eurozone and the United Kingdom for the Easter and Passover holidays. Traders remain fixated on Greece's debt woes with a new wave of skepticism regarding the country's ability to successfully reduce its fiscal deficits and refinance its maturing debt in the second quarter. European Central Bank member Kranjec reported the European Union won't do anything special to support Greece. Euro bids are cited around the US$ 1.3335 level.
Join the Discussion