Mixed fortunes for major currencies

On Friday January 6, a better job report from the US sent the euro tumbling against the dollar to trade at US$1,2717.
Renewed hopes from the eurozone to try and speed up funds jump-started the euro, currently trading at US$1,2781 to the dollar.
The market is selling the euro on any rally as fundamentals continue to drive global markets.
The outlook has been bad despite the ECB rolling out a three-year liquidity programme to help aid European banks in their fight against liquidity problems.

The market response to that has not been positive as the euro is on a free-fall and the question on every investor’s mind is the euro heading for parity against the dollar?
Still the underlying demand for the euro is weak and this could push investors to cut bets on the its revival this quarter.
The euro-dollar pair has been going through fluctuations due to uncertainties, but the bias is in favour of the dollar.
The dollar has been leading gains against the major currencies on strong economic data from the US.

A US recovery to the upside could hurt the dollar as investors will be pushed into treasuries, commodities and other growth related currencies.
The dollar index, which measures the greenback against currencies of its six major US trading partners, trimmed down its losses buoyed by a better than expected jobs report to touch 81.265.
Emerging market currencies and commodities have been under pressure concerning the current European situation and global slowdown as that deters risk taking, but a better jobs report from the US revived them as we saw them erase losses.

At the moment, the eurozone is damned with faint plans as a no summit deal has not brought about a debt solution.
The euro gained against the dollar to trade at US$1,2781 and further gained against the yen to trade at 98,08.
The dollar slipped against the yen to trade at 76,97 yen and rose against the Swiss franc to trade at 95,20 US cents.

With more economic pressure in the EU and austerity being the order of the day, investors are looking at life outside the EU those member states that are not part of the EU countries like Norway and Switzerland.
Both countries have valuable assets boosting their confidence in standing apart from the EU.
Switzerland has gold in its strongboxes and a currency that is better positioned than the euro despite its central bank intervention in September 2011, to stem gains against the euro.

Norway boasts oil, a well-managed debt and a currency that is doing so well against the euro.
The Swiss franc rose against the euro to trade at 1,2156 and fell against the dollar to trade at 95,20 US cents.
In London, the sterling pound fell against the dollar to trade at US$1,5455 on a positive jobs report.

The pound extended gains against the euro as it rose to trade at 82,39 pence per euro.
The GBP-EUR currency pair is one to watch given the upheavals in the euro area as investors are considering it a better hedge as compared to other currency pairs in the eurozone.
There is some profit-taking going on in the pound-euro currency pair. Investors would rather go long pound and short euro and Swiss franc all against the pound.

In the South Pacific, the Australian and the New Zealand dollar reversed earlier losses against the dollar on better jobs report.
The Aussie dollar rose and this boosted demand for high yielding assets creating demand for their exports.
The Aussie dollar’s movements have been stalled especially to the upside by bearish data in Europe and China.

The Aussie dollar rose to trade at US$1,0228 against the dollar and strengthened against the yen to trade at 76,94 yen.
IMF boss Christine Lagarde has reiterated that the South African economy could be affected negatively by unemployment and bearish data coming from the eurozone.
The rand normally moves in tandem with the euro as the eurozone accounts for 60 percent of their exports.

The rand advanced against the dollar after a positive jobs report boosted demand for metals and growth related currencies.
The rand rose to trade at 8,1287 to the dollar and rose to trade at 10,3950 against the euro.

Gold rose slightly as it traded at US$1 620,50 an ounce. Most of the metals were buoyed by a positive jobs report spilling through the markets from the US.
This boosted the demand outlook for commodities despite a Chinese slowdown and the situation in Europe.

Crude oil rose to trade at US$101,97 a barrel as it looks likely that the price will reach US$102 per barrel.
The twin drivers for such a jump was better job report and supply fears that have since disturbed trade in the commodity.