Tuesday, May 6, 2014

Euro Gains on Economic Recovery

The Euro edged up against the dollar as investors avoided the greenback on fears an escalating crisis in Ukraine may drag the Washington into the conflict and dampen recovery, though upbeat data out of the U.S. service sector cushioned the dollar and stabilized it. In U.S. trading, the shared currency was up 0.10% at 1.3883, up from a session low of 1.3865 and off a high of 1.3886.

Investors were paying close attention to events unfolding in Ukraine, after conflict between the government and pro-Russian separatists grew more widespread over the weekend, which weakened the dollar. Elsewhere, profit taking from Friday's upbeat jobs report softened the greenback as well.

The dollar firmed last week after the Labor Department reported that the U.S. economy added 288,000 jobs in April, well above expectations for jobs growth of 210,000, while the unemployment rate dropped to a five-and-a-half year low of 6.3%. Still, concerns that long-term unemployment will remain a problem for the U.S. economy tarnished the otherwise positive jobs report, as the headline jobless rate fell in part due to a drop in the labor force, a sign that many who have been out of work for a long time quit looking for jobs and thus are no longer considered part of the labor pool.

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