Currencies: Dollar slides after jobs report weakness

Financial Services


The U.S. dollar tracked lower on Friday, following a cooler-than-expected jobs report. Commodity-linked currencies meanwhile strengthened after OPEC members and Russia agreed to curb oil production.

The November jobs report was called “uninspiring” by economists, after only 155,000 new jobs were created versus the 190,000 expected. The unemployment rate was meanwhile steady at 3.7%.

The ICE U.S. Dollar Index

DXY, -0.02%

 was down 0.1% at 96.685.

Don’t miss: Why currency experts expect the dollar to struggle in 2019

Commodity currencies like the Canadian dollar

USDCAD, -0.6202%

Norwegian krone

USDNOK, -0.3802%

 and Russian ruble

USDRUB, -0.9132%

 climbed after OPEC members and Russia agreed to curb oil

CLF9, +4.06%

 production. The greenback last bought C$1.3307, down 0.6%; 8.4871 krone, down 0.4%; and 66.3360 ruble, down 0.7%.

Canada’s currency was also supported by a particularly strong local jobs report, which saw unemployment fall to its lowest level in more than 40 years.

The euro

EURUSD, +0.0791%

the greenback’s major rival and biggest component of the dollar gauge, was higher, fetching $1.1395, versus $1.1379 late Thursday. A revised reading of third-quarter eurozone gross domestic product put it at an annual rate of 1.6%, just below the previous reading of 1.7%.

“Despite being medium-term euro bearish, we admit that a fair amount of ‘bad news’ is already baked into the euro,” said Stephen Gallo, European head of FX strategy. “The growth numbers put the European Central Bank in an awkward position though, and we are starting to come to the conclusion that next week’s ECB decision will be composed of one of two likely options: 1) announce an end to outright purchases alongside a new support program or 2) extend outright purchases by three months.”

In Germany, Europe’s largest economy, Chancellor Angela Merkel’s Christian Democrats chose her longtime ally Annegret Kramp-Karrenbauer — currently the party’s secretary-general — to succeed her as party leader. The party election was seen as a vote for continuity in the CDU.

The British pound

GBPUSD, -0.4459%

 was weaker at $1.2748, compared with $1.2782 late Thursday, ahead of a crucial Brexit vote next week. On Tuesday, the British Parliament is due to decide whether the deal Prime Minister Theresa May agreed with the European Union will go through.

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Anneken Tappe is a markets reporter for MarketWatch. She is based in New York.

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