Euro up despite US job figures

The euro strengthened by 1.09 cents (0.78%) against the US dollar yesterday to finish the day at $1.4140.

• In early trading yesterday, the euro strengthened against the dollar as better-than-expected manufacturing data released in the eurozone indicated the 16-nation bloc will contract much less in the second quarter even if growth remains a long way off.
  
• Buoyant European equity markets also helped extend the euro’s gains as risk appetite improved, however the single currency’s progress was checked in the early afternoon following the release of surprisingly poor US employment figures. US private employers cut 473k jobs last month, more than forecast but less than the 485k jobs lost in May.
  
• Worse-than-expected US pending home sales data, released mid-afternoon, also capped the euro’s gains to some extent, after they came in at 0.1% this month, well below the 0.7% analysts had been expecting.
  
• However, US manufacturing PMI figures were ahead of forecast at 44.8, stemming the single currency’s dip to some degree.
  
• In trading so far today, the euro has pared some of yesterday’s gains as investors await important announcements out today. I n the eurozone, the European Central Bank’s latest interest rate decision is due at 12.45 BST, whilst in the US important Non-Farms employment data is out at 13.30 BST.