Jobs Prompt Shift to Riskier Assets

The dollar whipsawed against the majors in early Friday trading following a key US labor report released for April. Traders initially bid the dollar higher on a better than expected reading in April non-farm payrolls, which improved by more than forecast, posting a loss of 539k jobs compared with calls for a loss of 600k payrolls versus an upwardly revised 699k loss in March. The April unemployment rate was in line with expectations, climbing to a fresh 25-year high at 8.9%, up from 8.5% from March. The better than anticipated payrolls figure prompted a move toward riskier assets as traders pushed the euro to a fresh one-month high against the greenback to the 1.36-level.

US equities climbed higher with the Dow Jones and S&P 500 higher by over 1% on a combination of sentiment that the recession may be moderating and the results from yesterday’s government bank stress tests. Crude oil and spot gold also climbed higher in the Friday session.

Euro Flirts with 1.36

Traders continue to bolster the euro, which edged above the 1.36-level versus the dollar and the 134-handle against the yen. Germany’s March industrial production was better than expected with a flat reading versus a 2.9% decline a month prior.

The euro touched the 1.36-level against the dollar amid a shift to riskier assets, its highest level since late March. Support starts at 1.3560, followed by 1.3530 and 1.35. Additional floors will emerge at 1.3470, backed by 1.3440 and 1.34. Gains will target resistance at 1.36, followed by 1.3640 and 1.3670. Subsequent ceilings are eyed at 1.37, backed by 1.3750 and 1.38.

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