Euro surrenders weekly gains as upbeat US jobs data spur Dollar rally

EUR/USD gives up its weekly gains as the US Dollar strengthens on better-than-forecast US jobs figures.
October US Nonfarm Payrolls increase by 165K, comfortably exceeding expectations of 65K.
The Euro faces further selling pressure from disappointing Eurozone Retail Sales and cautious remarks from the ECB.

EUR/USD has surrendered the week's entire advance on Friday, with demand for the US Dollar (USD) strengthening after US Nonfarm Payrolls (NFP) exceeded expectations. The pair is trading near 1.1132 at the time of writing, a decline of 0.77% for the day.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

October's US jobs gain of 165K was more than twice the projected 65K. September's increase was also revised upwards, from 29K to 60K, while the Unemployment Rate declined from 4.2% to 4.1%.

Average Hourly Earnings increased 0.4% MoM against expectations of 0.3%, with wage growth also surpassing forecasts. On an annual basis, earnings growth moderated from 3.2% to 3.1%, although it remained above the 2.9% estimate.

Up 0.73% on the day, the US Dollar Index (DXY) is trading near 102.33. The index measures the Greenback's performance against a basket of six major currencies.

Labour market resilience, a view held by most Fed officials, is reinforced by these figures. With the Fed committed to returning inflation to its 2% target, a further interest rate increase in December remains a possibility. Risks to inflation continue to be skewed upwards, especially through higher energy costs associated with the Middle East conflict.

The Euro is also under pressure from Eurozone Retail Sales that fell short of expectations. Following August's 2% contraction, sales declined 0.7% MoM in September, against a forecast fall of 0.1%. Annual growth eased from 1.3% to 0.4%, missing the 0.6% estimate.

Although traders anticipate another interest rate increase from the European Central Bank (ECB) in December, policymakers continue to strike a cautious tone. Speaking on Friday, Chief Economist Philip Lane said inflation must return to target within a year or two, adding that financial conditions had already tightened. Echoing the comments made by ECB President Christine Lagarde on Thursday, Lane said: “Let’s gather information between now and December and let’s see what we do in December,”

How Is the US Dollar Performing Today?

Today's percentage moves in the US Dollar (USD) against the major currencies listed are shown below. The US Dollar recorded its strongest performance against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.77%	0.79%	0.40%	0.80%	1.12%	1.20%	0.54%
EUR	-0.77%		0.03%	-0.37%	0.04%	0.35%	0.43%	-0.23%
GBP	-0.79%	-0.03%		-0.38%	0.01%	0.33%	0.41%	-0.25%
JPY	-0.40%	0.37%	0.38%		0.41%	0.73%	0.80%	0.15%
CAD	-0.80%	-0.04%	-0.01%	-0.41%		0.31%	0.39%	-0.27%
AUD	-1.12%	-0.35%	-0.33%	-0.73%	-0.31%		0.08%	-0.58%
NZD	-1.20%	-0.43%	-0.41%	-0.80%	-0.39%	-0.08%		-0.64%
CHF	-0.54%	0.23%	0.25%	-0.15%	0.27%	0.58%	0.64%

Percentage movements between major currencies are presented in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, selecting the US Dollar on the left and following that row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.