Euro ETF Weakens After Draghi Speech, Jobs Report

December 7th at 9:04am by John Spence

CurrencyShares Euro Trust (NYSEArca: FXE) is in a three-day slide to end the week following a dovish speech from European Central Bank President Mario Draghi and a better-than-expected U.S. nonfarm payrolls report for November.

The euro had been solid lately but suffered its largest decline in a month after the ECB cut its growth estimates and foreshadowed a potential rate cut next year, CNBC.com reports.

“We don’t think ECB President Draghi has completely killed the rally in the euro, the currency pair has had a very nice run over the past few weeks and a correction is not unexpected,” said Kathy Lien, managing director of forex strategy for BK Asset Management, in the article.

FXE, the euro ETF, was down 0.6% in Friday’s premarket following a nearly 1% decline the previous session.

Meanwhile, PowerShares DB US Dollar Index Bullish (NYSEArca: UUP) rose 0.4% after the Labor Department said the U.S. economy added 146,000 jobs last month, topping the 85,000 expected by economists polled by Bloomberg.

“We’re making progress in the labor market,” said Michael Gapen, an economist at Barclays, in a Bloomberg report. “We expect a return to a pace of hiring that suggests we’re moving in the right direction. It’s not as fast as policy makers would like, but employment is growing.”

UUP is designed to track the dollar’s movement against a basket of currencies. The ETF could be getting a boost Friday from speculation the better-than-expected November jobs figure will make the Federal Reserve less likely to launch additional stimulus.

Gold futures tumbled by nearly $20 an ounce immediately after the release of the nonfarm payrolls report before bouncing. SPDR Gold Shares (NYSEArca: GLD) was on track for a lower open Friday.

CurrencyShares Euro Trust

Full disclosure: Tom Lydon’s clients own GLD.

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