The dollar extended its advance from a nine-month low against the euro as employment data came in almost three times higher than the market has forecast.
The single currency fell early in the session as weaker than expected European retail sales figures and German factory data were published. Further news that the Spanish economy had stagnated re-positioned focus on to the troubled periphery nations and their debt problems.
Midway through the London session, data revealed that October’s US non-farm employment change was up 151,000. The number was a vast improvement on last month’s fall of 41,000 and bettered analysts’ predictions of a lowly 61,000.
Further news of a liquidity problem within a major Spanish bank (not hard to guess which one) has helped depress the euro further.
The greenback is currently trading at $1.4093 and $1.6233 against the euro and the pound respectively.
In other news, the aussie and kiwi dollar look set to notch up their best weekly gains in months and don’t look like stopping. The aussie broke through parity this week to hit a 28 year high (the highest level since the aussie was allowed to float on the open market) of $1.0181 against the US currency.
There is not as much market moving data out next week, however inflation reports from the UK and China could be very important. Especially for our brothers from the antipodes with lofty aspirations. Hopefully England can put one over on them this weekend!
Tom Hampton
Analyst – Caxton FX
