The euro has pushed closer to USD1.30 this morning as the negative fallout of Friday's US labour market report continues to be felt. The weaker than expected jobs growth has reinforced the view that the US Federal Reserve will keep interest rates at or close to 1.0pc for some time. This morning, the euro rose to a new record of USD1.2883, just shy of USD1.29.
"As well as ongoing concerns about the US current account deficit, dollar sentiment has been badly hit by Friday's much weaker than expected non-farm payrolls report," said Geraldine Concagh, senior economist at AIB Treasury. The report showed that US companies created just 1,000 jobs last month, against forecasts for a rise of 130,000-150,000. "The data reinforce the view that US interest rates will continue to stay low," Concagh said. Last week, Fed governor Ben Bernanke indicated that the Federal Reserve had no plans to raise interest rates anytime soon, noting a "persistent softness" in the labour market. The dollar fell sharply in the wake of his statement, pushing the euro to a then record above USD1.27. //www.fxcentre.com