The euro climbed against the dollar on Thursday, reflecting a
pullback in the buck's big rally of 2015 amid patches of
weaker-than-expected U.S. economic data.
The single currency was 0.6% higher in early European trade at
$1.0825. Traders said there was no fresh news driving the move, but
investors were continuing to digest Wednesday's upbeat
manufacturing data from the eurozone, which contrasted with
disappointing manufacturing and jobs data in the U.S.
The recent signs of weakness in the U.S. economy have prompted
investors to push back their bets for the first interest rate rise
in the U.S., stalling the dollar's gains.
But a majority of investors is still betting on further gains
for the buck. That could leave it vulnerable to another pullback if
Friday's nonfarm payroll data disappoint, according to currency
strategists at Citigroup.
"A weak outcome will confirm emerging fears that the
first-quarter slowdown was not an aberration," they said.
The euro remains more than 10% lower against the buck this year.
The recent pause in its decline, bouncing back from a 12-year low
of $1.05 in March, means there is scope for further declines,
strategists at BNP Paribas said.
European stock markets were quiet ahead of the continent's
four-day weekend, after rallying on Wednesday's strong
manufacturing data. The Stoxx Europe 600 was 0.1% lower in early
trade.
Equities in Europe climbed sharply in the first quarter, helped
by the European Central Bank's bond-buying stimulus program, a
weaker euro, and signs that a tentative economic recovery is taking
hold.
That contrasts with U.S. stock markets. The S&P 500 fell
0.4% on Wednesday, wiping out its meager gains for the year.
In commodities markets, Brent crude oil was up 0.2% at $57.19 a
barrel. Gold fell 0.2% to $1,205.40 an ounce.
Write to Tommy Stubbington at tommy.stubbington@wsj.com
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