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The Euro in New York: Up on the Day, Flat on the Week

Posted by Joseph Trevisani on Aug 1, 2014 5:07:00 PM

The euro opened New York trading at 1.3396 (8:30 am) 1.3394, after a slack Tokyo session (1.3383-91)  and a 22 point London range (1.3379-1.3401).

The U.S. July employment report was generally positive with 209,000 jobs created, the sixth month in a row with more that 200,000 jobs and 15,000 added in revisions to the prior two months. The unemployment rate rose 0.1 percent to 6.2 percent as a modest flow of people returned to the job search. However, wages were flat as were hours worked and the labor forece participation rate rose just 0.1 percent off its generational low to 62.9 percent. 

The Federal Reserve under Janet Yellen has emphasized that  weak labor market conditions have restrained wages and kept the economy from a full recovery. That concern translated into the Treasaury market with the 10-year yield falling 4 basis points at the release and 6 on the day closing at 2.49%. 

There was considerable volatility at the release with the euro popping from 1.3395 to 1.3433,  falling to 1.3385 and then rushing back to 1.3430 within 35 minutes of the payroll report.

Weaker U.S. yields continuted to undermine the dollar  for the rest of the session. The euro touched 1.3445 mid-morning and then retreated to 1.3426. The pair saw a final push to 1.3441 at the London close and then subsided to a 1.3422-33 range for the balance.

CFTC data for positions up to Tuesday July 29, showed accounts holding a mildly short position at -108,075 contracts. Positions over 100,000 contracts are normally deemed extended. 

The euro opened the week at 1.3433 and closed today 1.3427. 


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