The EUR/USD currency pair today rallied higher briefly after the release of disappointing US non-farm payroll data during the American session, but quickly retraced all its gains. The currency pair’s rapid tumble was triggered by a Bloomberg report indicating that the European Central Bank was advocating for prudent policies in the face of the strong euro.
The currency pair rallied to new daily tops, but quickly retraced all its gains losing over 100 points from its session tops.
The currency pair’s rally was triggered by several crucial figures, chief among them being the disappointing US non-farm payroll data released by the Bureau of Labor Statistics. The NFP figures came in at 156,000 versus the market consensus of 180,000 new jobs. The unemployment rate for August also disappointed as it was recorded at 4.4%, which was much higher than the expected 4.3%. The US ISM Manufacturing index was recorded at 58.8 as compared to the expected 56.5 and contributed to the pair’s further decline. The University of Michigan consumer survey also missed expectations.
The EUR/USD’s abrupt decline was facilitated by the ECB report citing the need for prudent policies due to the strong euro. The report indicated that the bank might postpone its quantitative easing tapering program until December. The report follows previous statements by Mario Draghi and other ECB members aimed at weakening the euro.
The currency pair’s future performance over the weekend is likely to be affected by political events in the US and Europe.
The EUR/USD pair was trading at 1.1878 as at 14:41 GMT having dropped from a high of 1.1979. The EUR/JPY was trading at 130.97 having declined from a high of 131.34.
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