Investing.com - The euro fell sharply against the dollar on Friday after strong U.S. employment report reinforced expectations for a mid-year rate hike by the Federal Reserve, underlining the diverging economic recoveries in the U.S. and euro zone.
The Labor Department reported that the U.S. economy added 257,000 jobs in January, far more than the 234,000 forecast by economists. December’s figure was revised to 329,000 from a previously reported 252,000.
While the unemployment rate ticked up to 5.7% last month from December’s 5.6% hourly earnings and the participation rate both saw increases in January.
The upbeat jobs was seen as strong enough to indicated that the Fed will remain on track to start raising rates from near zero levels as early as June.
EUR/USD was at 1.1316 in late trade, down 1.14% for the day.
The euro remained under pressure as concerns over Greek debt negotiations continued to weigh on market sentiment.
Ratings agency Standard and Poor’s downgraded Greece late Friday and warned that time is running out for Athens to reach an agreement on a new financing program with creditors.
S&P downgraded Greece to B- from B, one notch above default, and kept the outlook at "negative", indicating that further ratings cuts are possible.
The announcement came after the ECB said it will no longer accept Greek bonds as collateral for lending, shifting the burden on to Greece’s central bank provide additional liquidity for its lenders.
In the week ahead, the euro zone is to release what will be closely watched data on fourth quarter economic growth on Friday. Investors will also be focusing Friday’s U.S. consumer sentiment data.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 9
Germany is to release data on the trade balance.
Tuesday, February 10
In the euro zone, France is to release data on industrial production.
Wednesday, February 11
In the euro zone, the euro group of finance ministers is to meet in Brussels.
Thursday, February 12
The U.S. is to release reports on retail sales and initial jobless claims.
Friday, February 13
The euro zone is to release preliminary data on fourth quarter gross domestic product.
The U.S. is to round up the week with preliminary data on consumer sentiment.