Forex - EUR/USD falls on jobs data, Fitch downgrade

Published 03/09/2012, 12:10 PM
Updated 03/09/2012, 12:12 PM
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Investing.com - The euro fell against the dollar on Friday, as solid unemployment data out of the U.S. boosted demand for the greenback, while a Fitch Ratings decision to cut Greece's ratings to a "restricted default" over its recent debt restructuring further weakened the euro.

In U.S. trading on Friday, EUR/USD hit 1.3107, down 1.26%, up from a session low of 1.3097 and off from a high of 1.3278.

The pair was likely to find support at 1.3097, the earlier low, and resistance at 1.3291, Thursday’s high.

The Bureau of Labor Statistics on Friday reported the U.S. economy added a net 227,000 nonfarm payrolls in February, outpacing expectations for a gain of 215,000.

Meanwhile, the government revised January's figures upwards to 284,000 from 243,000.

The news fueled sentiment the Federal Reserve will hold off on any plans to roll out a third round of quantitative easing, which are asset purchases from banks designed to stimulate the economy, with a weaker dollar being a side effect.

The Fed has carried out two rounds of quantitative easing since the downturn, pumping USD2.3 trillion into the financial system in the process.

Also in the U.S., the country's trade gap widened further than expected, coming to USD52.6 billion.

Meanwhile, the Fitch move on Greece's ratings sent the euro falling even further.

Greece recently restructured its debts with private creditors and to bring some of them on board, Athens activated collective action clauses on the bonds, which may mean credit default swap payments might kick in.

German inflation figures fell in line with expectations, rising 0.7% in February from January.

The euro was down against the pound and down against the yen, with EUR/GBP trading down 0.29% at 0.8362 and EUR/JPY down 0.03% at 108.22.

On Monday, the U.S. will release its federal budget balance, while in Europe, French inflation and U.K. balance of payments figures are due out.





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