Euro at 2-month highs against weaker dollar

07/05/2015 10:23 AST

The euro was trading at two-month highs against the broadly weaker dollar on Thursday as disappointing data on U.S. private sector jobs growth pointed to weakness in the labor market ahead of the government nonfarm payrolls report on Friday.

EUR/USD was at 1.1351, the highest level since February 26.

The ADP nonfarm payrolls report on Wednesday showed that the U.S. private sector added just 169,000 jobs in April, far fewer than the 200,000 expected by economists.

The downbeat data fuelled fears that the government employment report, due out on Friday, would also fall short of forecasts.

Recent economic reports have indicated that the economy has slowed since the start of the year prompting many investors to push back expectations on the timing of an initial rate hike by the Federal Reserve.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 94.20, not far from the two-month trough of 93.96 set on Wednesday.

The single currency was also boosted as German 10-year bund yields rose to their highest levels of the year, narrowing the gap with their U.S. counterparts.

Sterling dipped against the dollar, with GBP/USD easing to 1.5232 from Wednesday’s highs of 1.5291 as investors awaited the outcome of U.K. general elections, which were widely expected to result in a hung parliament and an unstable coalition government.

The dollar was near one-week lows against the yen, with USD/JPY at 119.49, while EUR/JPY was at 135.69, the highest level since late February.

Investing.com