Euro makes strong gains against the US dollar

The euro rose markedly against the US dollar on Friday, strengthening 1.7% to finish the day at 1.3633.

• In early trading on Friday the euro rose against the US dollar, as expectations the pace of US job losses may be slowing prompted some traders to take on the “riskier” single currency.
  
• The euro also strengthened on the view that the ECB was taking action – however limited – to help the region’s ailing economy, following the announcement of their quantitative easing program the day before.
  
• The release of US Non-farm Payrolls data further strengthened the euro early in the afternoon, as it showed that US employers cut 539k jobs in April, much less than the 590k economists predicted and the 663k last month.
  
• The employment report did include some less encouraging signs, however, including a rise in the jobless rate to 8.9%, the highest since September 1983, but investors largely shrugged this off, with the euro hitting a one-month high in the early afternoon.
  
• The single currency continued its gains Friday afternoon, buoyed by news it had broken through its 200-day moving average, a key resistance on the charts. Analysts said buying by funds using trading models was behind some the currency’s strength.
  
• Finally, a general improvement in risk appetite following strong equity market performance on Friday also contributed to the euro’s gains, as investors sold the greenback to buy into the higher-yielding single currency.
  
• In early trading today the euro has pared some of Friday’s gains as investor hesitancy sets in ahead of some important announcements later in the week.
  
• There are no major announcements due in the eurozone today or the US today.