In an effort to stabilize the debt markets and stem the Euro region’s debt crisis, the European Central Bank announced its plan to buy government bonds last week. This prompted the Euro rate to climb the most in six months against the U.S. Dollar. The President of the ECB, Mario Draghi, stated that the central bank will target bonds with maturities of up to three years and the purchases will be sterilized, meaning they won’t have a serious impact on money supply.
The shared currency was also supported by weak job reports out of the U.S., a factor that caused the greenback to decline versus 16 of its most traded Forex money peers especially as it fueled further speculation that the Federal Reserve may implement another round of monetary easing. The Euro retreated somewhat on Sunday in anticipation of the investor confidence report due out today.
The U.S. market remained choppy throughout the weekend after Friday’s Non-Farm Payrolls showed a paltry 96,000 increase in jobs. A dip in the unemployment, from 8.3 to 8.1 percent, was attributed to the possibility that people gave up looking for jobs, which in turn boosted the possibility the Federal Reserve will take action to stimulate the economy.
Other reports indicated that a decline in demand for safe havens in the currency market brought on the Swiss Franc’s biggest weekly drop against the Euro.
And lastly, the greenback plunged to a one-year low against the Canadian currency following the release of weaker than anticipated U.S. employment metrics.