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Forex - EUR/USD extends gains on lackluster U.S. jobs report

Published 09/09/2013, 12:23 PM
Updated 09/09/2013, 12:24 PM
Investing.com - The dollar extended Friday's losses against the euro on Monday as investors continued to avoid the greenback after a poor U.S. August jobs clouded expectations for a Federal Reserve start date to begin tapering the pace of its asset purchases.

In U.S. trading on Monday, EUR/USD was up 0.56% at 1.3254, up from a session low of 1.3164 and off from a high of 1.3263.

The pair was likely to find support at 1.3105, Friday's low, and resistance at 1.3398, the high from Aug. 28.

The U.S. economy added 169,000 jobs in August, the Bureau of Labor Statistics revealed on Friday, less than market calls for a 180,000 increase.

July 's figure was revised down to 104,000 from 162,000, while June's figure was revised down to 172,000 from 188,000.

The private sector added 152,000 jobs in August, well beneath expectations for a 180,000 rise

The U.S. unemployment rate fell to 7.3% in August, from 7.4% in July, as more people left the workforce. Analysts were expecting the unemployment rate to remain unchanged last month.

The data continued to fuel sentiments that the Federal Reserve may hold off on announcing plans to begin winding down its USD85 billion in monthly bond purchases at its Sept. 17-18 policy meeting.

Such stimulus tools weaken the greenback to spur recovery by driving down long-term interest rates, and talk of the Federal Reserve keeping its asset-purchasing program in place for longer than once expected can soften greenback demand and send investors chasing higher-yielding currencies and asset classes.

Advancing economic indicators in Europe and Asian furthered whetted appetite for risk and repelled investors away from the safe-haven greenback.

The Sentix index of euro zone investor confidence rose to a six-month high of 6.5 in September from -4.9 in August. Analysts were forecasting a -2.8 reading.

Meanwhile in Japan, revised data released earlier showed that the economy expanded by 0.9% in the second quarter, in line with expectations.

The yen also came under pressure after Japan won its bid to host the 2020 Summer Olympics, which sparked expectations for increased construction and spending ahead of time.

Separately, China reported that its exports grew 7.2%  year-over-year in August, up from 5.1% in July, which painted a picture of an improving global economy.

Elsewhere, the euro was up against the pound and up against the yen, with EUR/GBP trading up 0.11% at 0.8442 and EUR/JPY trading up 1.16% at 132.17.








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