Euro Drops Against Dollar After Jobs Data

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The euro dropped against the dollar on Friday in New York after a better-than-expected jobs report from the U.S. The European currency also saw weakness versus the sterling, but gained on the yen.

The European Central Bank has announced that it is withdrawing some of its emergency measures as the 16-nation economy began to grow in the third quarter and conditions in the region's financial system showed notable improvements, suggesting that worst of the crisis is behind now.

However, the central bank is unlikely to raise interest rates anytime soon. The central bank has stressed that its liquidity support remains substantial and indicated that its exit strategy will be gradual and timely.

Meanwhile, Markit Economics reported that the Germany Construction Purchasing Managers' Index stood at a seasonally adjusted 44.6 in November, up from 43.4 in the previous month. A reading above 50 indicates expansion, while one below 50 suggests contraction. This marks the twenty-first consecutive month in which the index has posted below the neutral 50 level.

The euro fell to a weekly low versus the dollar, dipping near 1.4875. The European currency had hit as high as 1.5140, challenging a 16-month high of 1.5143.

The Labor Department revealed that non-farm payrolls edged down by 11,000 in November. Most economists had expected a decline of at least 100,000. The unemployment rate also unexpectedly dipped to 10%.

The euro dropped to a nine-day low against the British pound, touching below 0.9000. The drop took the 16-member currency below a near-term support level.

UK's construction output increased 2% sequentially in the third quarter, an upward revision from a 1.1% decline reported in the third quarter GDP data released last week, the Office for National Statistics said Friday. On an annual basis, the construction production dropped 11% in the third quarter.

The euro rallied to its best level in nearly three weeks against the Japanese yen, moving near 134.10. The European currency has been trending higher for about a week.

(Market News Provided by RTTNews)