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After a period of record lows for the euro which resulted in it almost achieving parity with the US dollar, some degree of recovery has begun to emerge, with the euro having tipped back over the 1.10 mark against the dollar for the first time since the beginning of March.
Hot on the heels of the US employment report which was released on Friday last week containing a lower than anticipated 126,000 newly created jobs, the dollar’s value suffered enough to bring the euro toward a mildly higher standing against the greenback.
On Friday, North America’s National Public Radio (NPR) detailed that prior to March, it had been quite a run for the U.S. job market. The economy had added more than 200,000 jobs every month, maintaining a level of job creation that hasn’t been seen since a 13-month run back in 1994-95.
Economists had predicted that the economy would add 245,000 jobs in March. They also predicted the unemployment rate would remain at 5.5 percent — and indeed it did, holding steady at that rate in the new report.
Congruently, CNBC reported that the disappointing new employment data could prompt the Federal Reserve to wait until September or even later to raise interest rates, rather than in June as initially anticipated.
“Market expectations had momentarily lurched towards a June rate hike, but such prospects have ebbed. A fifty-fifty chance of a hike in September, and that being the only tightening this year, is the view now being re-established,” said Koji Fukaya, president at FPG Securities in Tokyo in an interview with Reuters.
The dollar weakened as U.S. Treasury yields sank in wake of the soft jobs data on Friday albeit in thin trading due to the holiday period. The benchmark 10-year note yield fell to a two-month low of 1.8 percent on Friday and last hovered around 1.83 percent.
The euro was up 0.1 percent at $1.0980 after touching $1.1018. The common currency had gone as low as $1.0864 before surging on the U.S. jobs data.
Chart courtesy of xe.com