US Dollar Pares Earlier Gains

US dollar is paring some of its earlier gains against the euro as risk appetite improves. However, greenback still has the upper hand against European currencies right now as the data coming out of the United States seems to indicate that the economic recovery could speed up.

Right now, the big excitement is the non-farm payrolls for January. Analysts had expected some gains for jobs, but the figures released beat expectations by quite a bit. The US economy added 243,000 jobs in January, and the unemployment rate fell from 8.5% to 8.3%. This state of affairs resulted in a great deal of enthusiasm for stocks.
Additionally, the US dollar saw a boost in Forex trading, especially when compared with the relatively insipid data coming out of Europe. Eurozone retail sales fell, and Great Britain continues to struggle with its economy. This has provided the US dollar with gains against the euro and the pound.
However, US dollar is paring some of its gains against European currencies as risk appetite increases and Forex traders look for higher yielding assets. US dollar has already begun its full-on retreat against the Canadian dollar.
At 16:17 GMT EUR/USD is at 1.3111, down from the open at 1.3145. GBP/USD is still lower as well, at 1.5790, off from the open at 1.5807. USD/CAD has retreated to 0.9954 from the open at 0.9992.

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