In spite of Friday’s release of better than expected labor data from the U.S. the greenback’s rally was short-lived, and as a result, the common currency Euro surged to a near 6-week peak. According to the U.S. Labor Department, 203,000 new jobs were added in November against expectations of a drop to 180,000 and the unemployment rate fell to 7.0% from 7.3%, beyond even analysts’ expectations and the lowest unemployment rate in nearly five years. Many believed that that positive news would be enough to give investors some hope that the Federal Reserve might begin scaling back its stimulus program, but given the Fed’s propensity for surprise it appears investors would prefer to hear the news directly rather than to speculate. Given that market players are waiting for the Fed to chip away some uncertainty, this week’s speeches by several of the Fed’s key members will be closely scrutinized.
As reported at 11:43 a.m. (JST) in Tokyo, the EUR/USD traded at a session peak of $1.3748, before edging back to $1.3711. The EUR/JPY struck a high of 141.54 Yen, a level last seen in October 2008; the common currency was boosted by speculation that the ECB has no intentions of adding additional stimulus anytime in the near future.
Euro Under Consideration
Last week, the European Central Bank’s Mario Draghi said that they would keep an eye on economic events in the Eurozone with a view to easing if necessary but otherwise would maintain the status quo. No details of what options Draghi might intend to employ were given, and analysts expect that the Euro’s relative strength might endure.