EUR/USD
The euro pulled back from two-and-a-half year highs against the dollar on Friday after data showed that the latest U.S. jobs report for February came in ahead of expectations. The U.S. economy added 175,000 jobs in February, the Labor Department reported, well above expectations for 149,000 new jobs. The unemployment rate ticked up to 6.7% from 6.6% in January, as more people joined the workforce. The euro built on strong gains from Thursday, after the ECB’s decision to refrain from any policy tightening dampened expectations for further easing by the bank. The central bank left its benchmark interest rate unchanged at 0.5%, saying economic conditions did not support tightening. ECB President Mario Draghi said the latest economic data indicated that the economic recovery in the euro zone is proceeding, and added that the bank was ready to take further action if needed.
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GBP/USD
The pound moved lower against the dollar on Friday after data showed that the U.S. employment report for February was stronger than forecast, bolstering the outlook for the economic recovery. The jobs report eased concerns over soft U.S. employment and other economic data seen in the past few months. The strong figure indicated that the Federal Reserve is likely to continue to scale back its stimulus program, which has weighed on the value of the dollar. Demand for sterling continued to be underpinned after business survey data earlier in the week indicated that the economic recovery in the U.K. is continuing. A report on Monday showed that the manufacturing activity expanded in February, while the pace of jobs growth in the sector reached a 33-month high. Meanwhile data on Wednesday showed that activity in the U.K. service sector slowed slightly in February, but growth remained robust. The upbeat data reinforced the view that the Bank of England will raise interest rates as soon as next year. The BoE left U.K. interest rates unchanged at their record low of 0.5% on Thursday, and also left its quantitative easing program steady at 375 billion pounds.
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USD/JPY
The dollar rose to its highest level against the yen in six-weeks on Friday after the U.S. employment report for February came in ahead of expectations. The U.S. economy added 175,000 jobs in February, the Labor Department reported, well above expectations for 149,000 new jobs. The unemployment rate ticked up to 6.7% from 6.6% in January, as more people joined the workforce. The jobs report eased concerns over soft U.S. employment and other economic data seen in the past few months. The strong figure indicated that the Federal Reserve is likely to continue to scale back its stimulus program, which has weighed on the value of the dollar. The Bank of Japan is expected to keep monetary policy unchanged when it announces its deliberations on Tuesday as the economy appears on track toward modest recovery and a 2% sustained inflation aim.
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USD/CAD
The U.S. dollar jumped higher against the Canadian dollar on Friday after the U.S. jobs report for February came in ahead of expectations while Canada’s jobs report was unexpectedly weak. The jobs report eased concerns over soft U.S. employment and other economic data seen in the past few months. The strong figure indicated that the Federal Reserve is likely to continue to scale back its stimulus program, which has weighed on the value of the dollar. The Canadian dollar weakened after official data showed that the economy unexpectedly eliminated jobs last month. Statistics Canada reported that the economy shed 7,000 jobs last month, confounding expectations for jobs growth of 15,000. The unemployment rate remained unchanged at 7.0%. The data came after the Bank of Canada left rates on hold at 1.00% on Wednesday and reiterated that the next move in rates would be data dependent. The bank said economic growth in the fourth quarter of 2013 was slightly stronger than anticipated, adding that it still expects growth of 2.5% in 2014.
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