Euro Drops On US Jobs Report, Euro-Zone Fears : A disappointing U.S. employment report and growing worries that the euro-zone debt crisis could spread to larger member nations dragged the euro lower against all its major rivals on Friday.
U.S. nonfarm payrolls rose a meager 18,000 in June, far below the 125,000 forecast by economists, shaking market confidence in global growth prospects.
Meanwhile, concerns about the stability of larger euro-zone nations, especially Italy, amid the ongoing debt crisis grabbed traders' attention.
"It's been a disappointing day in terms of news both for the dollar and the euro," said Vassili Serebriakov, foreign-exchange strategist at Wells Fargo. "On the European side of the equation, we've seen some deterioration in the bond market particularly."
Concerns about Italian politics and how Italian banks will fare in stress-test results expected next week weighed heavily on local banks' stocks and on bonds. Yields on Italian 10-year bonds hit euro-era highs this week, while the cost of insuring Italian debt against default rose sharply Friday.
The euro fell more than 1 cent on the day against the dollar, while sliding more than 1% against sterling. The common currency also dropped more than 1.5% against the Japanese yen and Swiss franc as investors fled to safer assets.
Investors are still awaiting clarity on the structure of Greece's bailout package as well.
"European policymakers are really behind," said Jens Nordvig, head of G-10 foreign-exchange strategy at Nomura Securities in New York. "The problem is, if they don't tackle the smaller countries, it will be very hard to tackle the larger countries."
Late Friday, the euro was at $1.4265 from $1.4363 late Thursday, according to EBS via CQG. The dollar was at Y80.68 from Y81.24, while the euro was at Y114.96 from Y116.62. The U.K. pound was at $1.6047 from $1.5962. The dollar was at CHF0.8371 from CHF0.8440.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at about 75.110 from about 74.957.
The dollar also suffered a significant drop against the yen following the report on nonfarm payrolls, pulling the U.S. currency back below Y81. The approaching U.S. debt-ceiling limit also has kept investors wary of the dollar.
The euro, meanwhile, could come under further pressure next week, when euro-zone finance ministers will meet to discuss Greece's bailout package and when European banks' stress-test results are released. A break below $1.42 could make more room for a fall to $1.41 or even the $1.40-level, analysts said.
Any further signs of contagion risks spreading to the euro-zone's larger members, or a further widening of sovereign-bond yield spreads will likely have a more severe impact on the common currency, analysts said.
"When you start talking about problems in Italy and Spain, it's a potential game-changer," said Mark McCormick, currency strategist at Brown Brothers Harriman.
U.S. nonfarm payrolls rose a meager 18,000 in June, far below the 125,000 forecast by economists, shaking market confidence in global growth prospects.
Meanwhile, concerns about the stability of larger euro-zone nations, especially Italy, amid the ongoing debt crisis grabbed traders' attention.
"It's been a disappointing day in terms of news both for the dollar and the euro," said Vassili Serebriakov, foreign-exchange strategist at Wells Fargo. "On the European side of the equation, we've seen some deterioration in the bond market particularly."
Concerns about Italian politics and how Italian banks will fare in stress-test results expected next week weighed heavily on local banks' stocks and on bonds. Yields on Italian 10-year bonds hit euro-era highs this week, while the cost of insuring Italian debt against default rose sharply Friday.
The euro fell more than 1 cent on the day against the dollar, while sliding more than 1% against sterling. The common currency also dropped more than 1.5% against the Japanese yen and Swiss franc as investors fled to safer assets.
Investors are still awaiting clarity on the structure of Greece's bailout package as well.
"European policymakers are really behind," said Jens Nordvig, head of G-10 foreign-exchange strategy at Nomura Securities in New York. "The problem is, if they don't tackle the smaller countries, it will be very hard to tackle the larger countries."
Late Friday, the euro was at $1.4265 from $1.4363 late Thursday, according to EBS via CQG. The dollar was at Y80.68 from Y81.24, while the euro was at Y114.96 from Y116.62. The U.K. pound was at $1.6047 from $1.5962. The dollar was at CHF0.8371 from CHF0.8440.
The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at about 75.110 from about 74.957.
The dollar also suffered a significant drop against the yen following the report on nonfarm payrolls, pulling the U.S. currency back below Y81. The approaching U.S. debt-ceiling limit also has kept investors wary of the dollar.
The euro, meanwhile, could come under further pressure next week, when euro-zone finance ministers will meet to discuss Greece's bailout package and when European banks' stress-test results are released. A break below $1.42 could make more room for a fall to $1.41 or even the $1.40-level, analysts said.
Any further signs of contagion risks spreading to the euro-zone's larger members, or a further widening of sovereign-bond yield spreads will likely have a more severe impact on the common currency, analysts said.
"When you start talking about problems in Italy and Spain, it's a potential game-changer," said Mark McCormick, currency strategist at Brown Brothers Harriman.
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