“In a sign that large speculators in the world’s biggest currency pair were caught off guard by the ECB, bets on further deprecation outweighed those on a gain by a net 182,845 contracts in the week through Dec. 1, according to Commodity Futures Trading Commission data. The single currency surged 3.1 percent on Dec. 3, the biggest rally since 2009,” Bloomberg reports.
Despite the lighter-than-expected ECB stimulus package, the sell-off may have been overdone. Investors may have pushed up the Eurozone markets Friday after realizing that fundamental factors, like continued central bank easing, are still supporting the economy.
The dollar appreciated Friday as the strong November employment report fueled expectations that the Federal Reserve will hike interest rates later this month. Nonfarm payrolls increased a seasonally adjusted 211,000 last month, with the unemployment rate at 5%, after a rising a revised 298,000 in October, reports James Ramage for the Wall Street Journal.
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