By TraderVox.com
Tradervox.com (Dublin) – The 17-nation currency advanced by most in six months against the US dollar last week after Mario Draghi, the European Central Bank President announced the bond buying program. Euro’s advance against the dollar was supported by poor Labor Department’s data which showed a worsening scenario in the labor market. Reports released last week indicated that Payrolls rose less than forecast as unemployment rate unexpectedly fell. The report sparked speculations that Federal Open Market Committee will add stimulus when they meet this week. The Canadian dollar advanced by most in almost a year as the Swiss franc fell as demand for safe haven currencies declined.
Richard Franulovich highlighted that Draghi’s announcement and the US Payrolls were the main events last week and both indicated to risk-on mood in the market. Franilovich, who is the Senior Currency Strategist in New York at Westpac Banking Corp, added that the Fed and ECB are underwriting risks hence investors are more inclined to sell the dollar and buy risk. The Swiss franc has registered the largest weekly decline against the 17-nation currency since November as demand for safety was significantly reduced by Draghi’s announcement. Axel Merk, who founded the Merk Investments LLC indicated that the European Central Bank action has provided further support for the euro by removing tail risk, hence putting the 17-nation currency on equal footings with other major currencies.
Euro advanced by 1.9 percent against the dollar to close the week at $1.2786 after increasing to a high of $1.2817 on Friday, the strongest level since May 22. It advanced by 1.7 percent against the yen to close the week at 100.25 yen. The euro had advanced to 100.43 on Friday, the strongest since July 14. Further, the shared currency advanced to its strongest since January against the Swiss Franc of 1.2155, registering the biggest weekly gain since November last year.
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