Investing.com -- EUR/USD inched up on Monday amid a quiet trade, as currency traders continued to react to a vigorous U.S. jobs report late last week that potentially provided the Federal Reserve with enough leeway to approve an interest rate hike when it meets next in December.
The currency pair traded in a tight range between 1.0719 and 1.0790 before settling at 1.075, up 0.0010 or 0.09% on the session. Last Friday, the euro crashed by more than 1.25% to a six-month low against the dollar following the strongest monthly U.S. jobs report in nearly a year. The euro has closed lower against its American counterpart in four of the last six sessions. Over the last month of trading, the euro is down by nearly 5% versus the dollar.
EUR/USD likely gained support at at 1.0623, the low from April 16 and was met with resistance at 1.1496, the high from Oct. 15.
Investors continued to react to last week's robust U.S. national employment report when the Department of Labor reported that nonfarm payrolls in October surged by 271,000, considerably above estimates of a 190,000 gain. The unemployment rate, also inched down to 5.0%, its lowest since April, 2008, while average hourly wages soared 0.4%, considerably above forecasts of a 0.2% increase.
The U-6 unemployment rate, a preferred measure of underemployment by Fed chair Janet Yellen, plunged by 0.2% to 9.8%, its lowest level since May, 2008. The U-6 rate measures the total level of unemployed workers plus those marginally attached to the labor force, as well as workers who are no longer looking for a job, but have looked for one over the last 12 months. The alternative measure of unemployment peaked at 18% in January, 2011 and exceeded 11% exactly one year ago.
Over the last few months, Yellen has indicated that the Federal Open Market Committee will employ a data-driven approach, as it weighs whether to raise short-term interest rates for the first time in nearly a decade. In testimony before Congress last week, Yellen noted that a December interest rate hike will be on the table if the Fed sees continued improvements in the economy and labor market. Investors await the release of data on U.S. retail sales, producer prices and consumer sentiment later this week for additional clues on whether the FOMC will approve a quarter-point rate hike when it meets next on Dec. 15-16.
In the euro zone, currency traders await the release of the latest third-quarter GDP figures later this week for further indications on potential growth trends over the next several months. GDP in the euro zone is expected to rise 0.4% on a quarterly basis, after a 0.4% increase in the second quarter. On an annual basis, third quarter GDP is expected to increase by 1.7%, following a gain of 1.5% last quarter.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six major currencies, closed at 99.12, down 0.17% on the session. The dollar still remained near seven-month highs.