Shutterstock photo

Forex - EUR/USD gains as European bond yields fall on BoJ move

Shutterstock photo

Shutterstock photo - The euro strengthened against the dollar on Monday after bond yields fell across Europe in wake of a Bank of Japan decision to buy Japanese government debt.

Weaker-than-expected jobs data released in the U.S. on Friday also pushed the dollar down.

In U.S. trading on Monday, EUR/USD was up 0.06% at 1.3012, up from a session low of 1.2969 and off from a high of 1.3038.

The pair was likely to find support at 1.2969, the earlier low, and resistance at 1.3107, the high from March 15.

The Bank of Japan earlier conducted its first government bond purchasing operation when it bought JPY1.2 trillion in Japanese government debt maturing in five years or more.

The move forms part of the Bank of Japan's plan to double its asset purchase program over the next two years and extend the maturities of the bonds it purchases as part of a larger strategy to hit a 2% inflation target.

The move made European debt more attractive and bolstered the euro against the greenback, which continued to see downward pressure from a weaker-than-expected March jobs report in the U.S.

The U.S. Bureau of Labor Statistics reported Friday that the U.S. economy added 88,000 nonfarm payrolls in March, well below expectations for a gain of 200,000 and below the 268,000 jobs added in February.

The private sector added 95,000 jobs last month, after an increase of 254,000 in February, missing expectations for a 209,000 rise.

The report also showed that the U.S. unemployment rate ticked down to 7.6% in March, from 7.7% the previous month, as more Americans left the labor force.

Analysts were expecting the headline unemployment rate to remain unchanged last month.

The news sent the dollar falling on expectations for the Federal Reserve to keep monetary stimulus programs in place, including its USD85 billion monthly bond-buying program that weakens the greenback as a side effect.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.61% at 0.8526, and EUR/JPY trading up 1.34% at 128.53. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

Read more News on or Follow us on Twitter at @ Newsinvesting

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics