The Dollar is capping a strong week, with the trade-weighted index up another 0.3% to a 2-month high. The S&P 500, which has closed higher every day this week (by a cumulative 3.7%) is down only 0.3% at time of writing. Another very strong official US labour market data release has provided the support today, with non-farm payrolls rising by a very sturdy 225,000 in January.
The Dollar’s gain has been the Euro’s pain with the EUR/USD cross slumping back below 1.10 although in trade-weighted terms the Euro has managed to make small gains.
Very weak German industrial output and trade data put the pressure on the Euro in early trading. Output in the Eurozone’s largest economy contracted a larger-than-expected 3.5% mom in December – weak factory orders gave little hope for output numbers but the December contraction was the largest in a decade. Unsurprisingly perhaps German exports rose only 0.1% mom, following a 2.2% mom contraction in November.
