The dollar was trading close to six month highs against the yen on Monday and was broadly lower against the other main currencies as Friday’s strong U.S. jobs report continued to underpin risk appetite.
During European morning trade, USD/JPY was up 0.27% to 103.11, near the six-month high of 103.37 struck last Tuesday. Friday’s U.S. nonfarm payrolls report showed that the economy added 203,000 jobs in November, well above expectations for jobs growth of 180,000. The unemployment rate fell to a five year low of 7.0%.
The data bolstered optimism over the outlook for the economic recovery and reinforced expectations that the Federal Reserve will start reducing its USD85 billion-a-month stimulus program at one of its next few meetings.
The increase in risk appetite fuelled gains in equities markets and dampened safe haven demand for the dollar and the yen.
Sentiment on the yen was also hit after data released on Monday showed that Japan’s economy grew at an annualized rate of 1.1% in the third quarter, slower than the preliminary estimate for 1.9% growth and below forecasts for 1.6%.
Elsewhere, EUR/USD was up 0.14% to 1.3723, the strongest level since October 31.
In the euro zone, data on Monday showed that Germany''s trade surplus narrowed in October as imports grew faster than exports, shrinking to EUR16.8 billion from EUR18.7 billion in September.
Germany exported goods worth EUR92.9 billion, up very slightly from EUR92.7 billion in September, while imports grew by 2.8% to EUR76.1 billion from EUR74.0 billion.
The pound was trading close to 27-month highs against the dollar, with GBP/USD up 0.23% to 1.6383.
The dollar was little changed against the Swiss franc, with USD/CHF dipping 0.03% to 0.8915.
The greenback was broadly higher against the Australian, New Zealand and Canadian dollars, with AUD/USD sliding 0.26% to 0.9080, NZD/USD inching down 0.04% to 0.8279 and USD/CAD rising 0.20% to 1.0653.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged down 0.09% to 80.19.
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