(Reuters) – The euro rose to a near six-week high against the dollar and close to a five-year peak versus the yen on Monday, after strong U.S. payrolls data and Chinese trade figures bolstered risk appetite.
European stocks also rose in early trade after robust Chinese exports, which supported expectations of a global recovery. On Friday, data showed U.S. employers hired more workers than expected in November, driving the jobless rate to a five-year low of 7.0 percent. .EU
But the better-than-expected jobs number was not robust enough to lead markets to price in an immediate withdrawal of monetary stimulus by the Federal Reserve, pushing U.S. debt yields lower and dragging the dollar down.
The dollar fell to a 1-1/2 month low against the low-yielding safe-haven Swiss franc, with the franc also buoyed by growing signs that deflation in Switzerland was abating and the economy was growing. The dollar fell to 0.8934 francs, its lowest since October 25 on trading platform EBS.
The euro rose to as high as $1.3748 in very thin early trade in Asia. It later slipped to $1.3707, but was slightly firmer on the day on higher money market rates in the euro zoneas chances of further near-term easing by the European Central Bank looked slim. <MMT/>
Against the yen, the euro climbed to 141.54, reaching highs not see since October 2008. It was last trading at 141.41 yen, up 0.3 percent on the day.
“The latest (U.S.) jobs report provide no certainty for a January or even December (Fed) tapering to be on the cards. Additional euro/dollar upside towards $1.38 cannot be excluded before the pair becomes a sell again,” said Manuel Oliveri, FX strategist at Credit Agricole.
A Reuters poll showed Wall Street firms expects the Fed to start reducing its massive bond-buying program no later than March, with only a handful of them expecting action as early as next week.
Fed policymakers will speak later in the day, likely attracting attention of traders wanting to know when tapering will begin. <FED/DIARY>
“The financial markets interpreted the (jobs) data as suggesting there’s no need to be pessimistic about the global economy, leading to risk-on trades,” said Minori Uchida, chief currency analyst at the Bank of Tokyo-Mitsubishi UFJ.
Against the yen, the dollar held firm at 103.15 yen following Friday’s 1.1 percent rally, not far from six-month peak of 103.38 hit on Tuesday. The yen continued to underperform on the Bank of Japan’s ultra-loose monetary policy and the pick-up in risk appetite.
Data on Monday showed Japan’s current account balance unexpectedly fell into the red in October, underpinning the dollar against the yen.