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Forex - EUR/USD gains in risk-on trading session

Published 12/09/2013, 12:43 PM
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Investing.com - The euro rose against the dollar on Monday as investors previously camped out in safe-haven dollar positions sold the greenback to take on risk after spending the weekend digesting better-than-expected U.S. jobs data.

In U.S. trading on Monday, EUR/USD was up 0.15% at 1.3725, up from a session low of 1.3695 and off from a high of 1.3731.

The pair was likely to find support at 1.3524, Tuesday's low, and resistance at 1.3818, the high from Oct. 28.

Profit-taking and risk-on trading strategies weakened the dollar and bolstered the euro's appeal on Monday.

On Friday, the Department of Labor said the U.S. economy added 203,000 jobs in November, beating expectations for a 180,000 increase and up from a downwardly revised 200,000 rise the previous month.

In the private sector, 196,000 jobs were added last month compared to expectations for a 180,000 rise, after an increase of 214,000 in October.

The report also said the U.S. unemployment rate fell to 7.0% in November, from 7.3% in October, beating expectations for a downtick to 7.2%.

Also on Friday, the preliminary Thomson Reuters/University of Michigan consumer sentiment index increased to 82.5 in December from 75.1 the previous month, far surpassing expectations for a 76.0 reading.

The data kept expectations firmly in place that the Federal Reserve will begin scaling back its USD85 billion in monthly bond purchases, which weaken the dollar to spur recovery.

While a Fed decision to taper monthly bond purchases would strengthen the greenback over the long term, hopes for a more robust U.S. recovery sent investors ditching safe-harbor dollar positions for more higher-yielding assets, especially amid sentiments that the Chinese economy is on the mend as well.

Meanwhile in the euro zone, data released earlier revealed that Germany's trade surplus narrowed in October as imports grew faster than exports, shrinking to EUR16.8 billion from EUR18.7 billion in September.

Germany exported goods worth EUR92.9 billion, up only fractionally from EUR92.7 billion in September, while imports grew by 2.8% to EUR76.1 billion from EUR74.0 billion.

A separate report showing that German industrial production unexpectedly declined by 1.2% in October, missing expectations for a 0.8% rise, met muted reaction from investors.

The single currency was down against the pound and up against the yen, with EUR/GBP trading down 0.23% at 0.8364 and EUR/JPY trading up 0.57% at 141.75.

On Tuesday, European Central Bank President Mario Draghi is to speak at an event in Rome.









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