A reluctance to place new bets ahead of key U.S. employment data trumped economic data and the trickle of euro-crisis headlines in European trading hours Friday, as major currencies generally held within tight ranges. The EUR was well supported, bobbing around the $1.3150 area against the dollar, reflecting positive signals from French borrowing costs, as yields on the country’s 10-year bonds sank to the lowest levels since last October. Comments from Chinese Premier Wen Jiabao that the Asian giant has neither the ability, nor the intention to “buy Europe,” failed to put a dent in the currency. News that Monday’s meeting of euro-zone finance ministers on Greece is likely to be delayed also failed to push the EUR out of its range for the day.
Instead, market participants were transfixed by the pending U.S. January non-farm payrolls data due at 1330 GMT. The consensus among economists is the U.S. economy will gain 125,000 jobs.
The CHF failed to soften against the EUR, holding the euro close to the CHF1.20 level that the Swiss National Bank has pledged to defend. Acting SNB Chairman Thomas Jordan reaffirmed the central bank’s determination to defend its ceiling on the franc. Equally, the JPY held firm against the dollar, bringing the threat of official intervention firmly into focus. Japanese Minister of Finance Jun Azumi has stepped up verbal intervention of late, warning he is concerned “one-sided” JPY rises don’t reflect economic fundamentals and that he will respond appropriately. Signs that the U.K. economy won’t slip back into recession boosted sterling against the euro to session highs. The poll of purchasing managers in the services sector showed activity rose in January to its highest level in almost a year.
After non-farm payrolls, U.S. manufacturing data for January is expected at 1500 GMT.
EasyForexNews Research Team