LONDON (SHARECAST) - The dollar weakened while the euro gained on Friday as some better-than-expected US economic data increased risk appetite, dampening the demand for the 'safe-haven' greenback currency.
Big news of the day on currency markets was that the Canadian dollar reached parity with the greenback for the first time since May 15th.
While the US jobless rate increased from 8.2% to 8.3% in July, the US economy increased payrolls by 163,000, much better than the 100,000 gain expected, which is thought to partially ease the concerns of policymakers.
"Despite the positive payrolls figure providing a boost in the US, the increased unemployment looks to have led to speculation that the Fed will opt for QE at the next meeting," said analyst Craig Erlam from Alpari.
Meanwhile, the Institute for Supply Management’s (ISM's) non-manufacturing index rose from 52.1 to 52.6 in July, compared with analysts' forecasts of no change.
The ICE dollar index, which measures the greenback against a basket of six other major currencies, fell from 83.32 to 82.39, down over 1%.
Markets were also still reacting to Thursday's comments from ECB President Mario Draghi. Speaking yesterday after a key interest rate meeting he indicated ECB bond purchases will be “on the short end of the yield curve.”
The euro increased from $1,2180 to $1,2375 on Friday.
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