MW: Euro down versus dollar ahead of U.S. job data
LONDON (MarketWatch) — The euro languished at its lowest level against the dollar in more than a decade Friday, under pressure before the start of the eurozone’s asset-purchase program, and ahead of the release of highly anticipated monthly jobs data from the U.S.
The euro EURUSD, -0.74% was trading at $1.0945, down from $1.1030 late Thursday in New York. The euro on Thursday hit an 11-year low as European Central Bank President Mario Draghi talked about Monday’s launch of the bank’s €1.1 trillion bond-buying program.
The greenback maintained its strong tone after Draghi said the ECB will buy negative-yielding assets as long as the yields are above the central bank’s deposit rate of minus 0.2%.
The next so-called risk event for the euro/dollar pair comes later Friday, with the U.S. Labor Department scheduled to release February jobs data. The U.S. likely added 238,000 new jobs last month, according to economists polled by MarketWatch. That would mark a small decline from January, but would still extend a streak of 200,000-plus increases to 12 months.
A key figure to watch is average earnings, which has been projected to rise 0.2% on a month-over-month basis, said Angus Campbell, senior analyst at FxPro, in a note. “This data is likely to confirm whether the dollar continues to push on to fresh eleven-year highs having just on Wednesday broken out beyond the recent highs that had kept its gains capped throughout February,” he said.
The jobs report is slated for release at 1:30 p.m. London time, or 8:30 a.m. Eastern Time.
Against the yen, the dollar traded above the psychologically-important ¥120 level. The greenback USDJPY, -0.09% was at ¥120.04, compared with ¥120.14 late Thursday in New York.
Yasuaki Amatatsu, analyst at global markets research at Bank of Tokyo-Mitsubishi UFJ, said upbeat jobs data may pave the way for the dollar to move toward ¥121.50, after gaining extra traction triggered by options-related stop loss buying orders just above ¥121.00, said Amatatsu.
WSJ market wrap: March 5, 2015(1:04)
U.S. stocks edged higher, snapping a two-session losing streak, as investors focused on Europe’s stimulus measures and looked ahead to the U.S. jobs report.
He also said brisk jobs data will also likely help the greenback strengthen against the euro, predicting that the common currency may fall as low as $1.08.
Federal Reserve Bank of San Francisco President John Williams on Thursday expressed confidence that robust economic growth and healthy job gains would push inflation up over time.
Speaking in Honolulu, the official reiterated that this positive outlook for the economy means that the Fed is getting closer to the day when it can raise short-term interest rates.
The WSJ Dollar Index BUXX, +0.16% a measure of the dollar against a basket of major currencies, was up 0.1% at 86.90.
