Pound Euro Exchange Rate Hits a 3 1/2 Year High as US Job Figures Dissapoint

6 Jul 2012 at 7 PM - Written by Ben Hughes

STORY LINK Pound Euro Exchange Rate Hits a 3 1/2 Year High as US Job Figures Dissapoint

The Pound to Euro exchange rate has hit a three and a half year high after the release of worse than expected US job figures. The figures raised fears that the global economy is suffering a slowdown and caused investors already worried about the Eurozone to cut their losses and their risk to exposure.

The steep fall of the Euro against the Pound and other currencies saw demand for safe haven currencies such as the Japanese Yen and the US Dollar increase. The increase to the safe havens caused the Pound to slip against the Dollar.

The jobs data showed that only 80,000 jobs were added to the US workforce, far lower than the 100,000 expected by the markets. The data is weak enough to fuel demand for safe haven assets but was not bad enough to force the Federal Reserve’s hand and implement further quantitative easing. Its current operation ‘Twist’ should be significant enough to aid the economy for now.

The euro fell 0.5 percent against sterling to 79.37 pence; its lowest level since November 2008, falling past an options barrier at 79.50 pence and triggered stop-loss sell orders at 79.45 pence.

The next support for the single currency was seen at the October 2008 lows around 77.00 to 77.50 pence, where the 100-month moving average also appears. Sterling fell 0.1 percent against the dollar to $1.5509, with support around the June 28 low of $1.5485.

Elsewhere the South African Rand plummeted by 1.7% as the news of the weaker than expected job figures emerged from the United States. The rand hit a session low of 8.2850 to the greenback, its softest level in a week, and was down 1.53 percent at 8.27.

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