Euro pressured by interest rate cut

Published: 8 Nov at 1 PM Tags: Euro, Dollar,

The euro remains under pressure following the European Central Bank’s decision to cut interest rates. The single currency is currently close to its lowest level in eight weeks. The dollar has had some of its gains tempered as analysts look to the latest US jobs report.

If there is evidence that the economy is strengthening it could push the Federal Reserve to taper its massive bond buying programme.

The euro lost 0.1 per cent to end at $1.3407 after earlier hitting a low of $1.3295. Against the yen the euro is currently steady at 131.61 yen. The dollar has managed to pull back 0.1 per cent against its Japanese rival to trade at 98.17 yen. On Thursday the greenback hit a spike of 99.41 yen.

The dollar index is also up 0.1 per cent to 80.897. Although economists have estimated a rise in the US unemployment rate to 7.3 per cent during October, non-farm payrolls are likely to have risen by around 125,000 jobs. However, payroll figures are likely to show up the impact of the recent government shutdown.

If payrolls remain strong, the Fed could move to taper its easy money policy, although this is unlikely to happen before the beginning of next year.