Investing.com - The euro dropped to fresh two-year lows against the U.S. dollar on Friday, as strong U.S. employment data fuelled optimism over the strength of the country's job market and sent the greenback broadly higher.
EUR/USD hit 1.2272 during U.S. morning trade, the pair's lowest since August 2012; the pair subsequently consolidated at 1.2276, declining 0.82%.
The pair was likely to find support at 1.2132 and resistance at 1.2458, Thursday's high.
In a report, the Labor Department said the U.S. economy added 321,000 jobs in November, exceeding expectations for jobs growth of 225,000. October's figure was revised up to 243,000 from a previously estimated 214,000, pointing to underlying strength in the labor market.
The U.S. unemployment rate remained unchanged at 5.8% last month, in line with expectations.
A separate report showed that the U.S. trade deficit hit $43.40 billion in October, down from $43.60 billion in September, whose figure was revised from a previously estimated deficit of $43.00 billion. Analysts had expected the trade deficit to narrow to $41.20 billion in October.
Data also showed that U.S. factory orders fell 0.7% in October, compared to expectations for a 0.2% slip. Factory orders in September were revised to a 0.5% decline from a previously estimated 0.6% fall.
In the euro zone, official data earlier showed that German factory orders rose 2.5% in October, exceeding expectations for a 0.6% gain. Factory orders in September were revised to an increase of 1.1% from a previously estimated 0.8% rise.
The single currency had strengthened broadly on Thursday after European Central Bank President Mario Draghi indicated that the bank would not embark on quantitative easing for now, saying the bank would reassess its stimulus program in the first quarter of 2015.
The euro was also lower against the pound, with EUR/GBP shedding 0.33% to 0.7873.