Last week, the euro hit a two-month high, but it's edging down at the start of this week. The drop is fueled by continuing Greek fears as well as the relative strength of the US dollar.
The Greeks continue to negotiate with their eurozone creditors, but there is little hope of an agreement before tomorrow's payment, of 750 million euros, is due to the IMF. Greece managed to make an earlier payment, of 200 million, but only because the government forced state agencies, including local schools, to transfer all funds to a special account at the Greek Central Bank. With all of this in mind, the euro was down broadly, trading at $1.1143 (down 0.5%) against the US dollar, 133.63 (down 0.41%) against the yen, and 0.7248 (down 0.04%) against the pound.
The US dollar received a welcome boost from the April jobs report which was released last Friday. The numbers showed 223,000 additional jobs for the month, only 1000 shy of predictions, and an official unemployment rate of 5.4%. It was considered a moderately good jobs report; however, the labor force participation rate remains stable at 30 year lows and the March numbers were revised further downwards. The data reinforced expectations that the US Federal Reserve will raise interest rates later this year, and the dollar reacted to the overall good news. In addition to the gains against the euro, the GBP/USD was at $1.5416, down 0.25%, and the AUD/USD was at $0.7886, down 0.58%. The dollar gained on the yen too, trading at 119.94, up 0.15%.
The US dollar index, a broader benchmark measure of the dollar's strength against several major currencies, went up 0.24% to reach 95.13.
Oil seems to have ended its price rally. Brent crude, the global benchmark price, was down 3 cents to $65.36 per barrel, while West Texas Intermediate, the US benchmark, lost 12 cents and was down to $59.27. These losses followed 8 weeks of gains in March and April.
Gold and silver are both down, but only slightly, trading at $1,185.16 and $16.42 (each down about 0.25%) respectively. Both metals are likely under slight pressure from the strengthening dollar, but gold especially is at the natural price "floor" of production cost.
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