Despite trading higher early in the day, the U.S. Dollar lost ground versus the Euro, as a result of much worse than anticipated unemployment figures, which were released a short while ago. Prior to the release of the news by the U.S. Labor Department, the U.S. Dollar had been enjoying an 11-month high against the Euro, buoyed by traders buying up the greenback in advance of the release.
Just prior to the release of the employment data, the Euro was trading at $1.4260 against the U.S. Dollar; once the announcement broke, the Euro fell to $1.4217 – the lowest since October 2007 -- before rebounding to $1.4308.
According to the U.S. Labor Department, during the month of August, approximately 84,000 jobs were lost, higher than the economists’ prediction of 75,000. This resulted in a rise in the U.S. unemployment rate to 6.1%, the highest it has been in more than 4½ years.
The U.S. Dollar’s recent sharp rally – a more than 10% increase over the basket of currencies during the past month – prompted some European central banks to sell the U.S. currency to keep their own currency from significantly weakening.