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Forex - Euro tumbles over 1% against stronger dollar

Published 06/05/2015, 09:58 AM
© Reuters.  Euro drops sharply against dollar after U.S. employment report
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Investing.com - The euro tumbled over 1% against the U.S. dollar on Friday, erasing earlier gains as strong U.S. employment data sent the greenback broadly higher and as concerns over a possible Greek default continued to weigh on the single currency.

EUR/USD pulled back from 1.1280, the session high, to hit 1.1077 during U.S. morning trade, plummeting 1.42%.

The pair was likely to find support at 1.0913, the low of June 2 and resistance at 1.1280.

The greenback was boosted after the U.S. Department of Labor said the economy added 280,000 jobs in May, exceeding expectations for an increase of 225,000. However, April's figure was revised to a 221,000 rise from a previously estimated gain of 223,000.

The report also showed that the U.S. unemployment rate ticked up to 5.5% last month from 5.4% in April. Analysts had expected the rate to remain unchanged.

U.S. average hourly earnings rose 0.3% in May, beating expectations for a 0.2% gain, after an uptick of 0.1% the previous month.

Meanwhile, sentiment on the euro remained vulnerable after Greece told the International Monetary Fund on Thursday that it would delay a debt payment of about $339 million due Friday, submitting a request to bundle payments totaling about $1.7 billion due this month into one payment.

Greek Prime Minister Alexis Tsipras has rejected proposals by creditors to help unlock more aid to help with repayments. Following late night talks with Greek Prime Minister Alexis Tsipras on Thursday, German Chancellor Angela Merkel said "we’re still far from reaching a conclusion."

Earlier Friday, official data showed that German factory orders increased by 1.4% in April, beating expectations for a 0.5% gain. The change in factory orders for March was revised to a 1.1% rise from a previously estimated 0.9% uptick.

The euro was also lower against the pound, with EUR/GBP declining 0.49% to 0.7278.

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