EUR/USD still below 0.9800 post NFP

The EUR/USD pair sharply fell with the initial market reaction to US NFP data that rose by 263K in September.

The pair is on track to end the week with a little change. The pair has also managed to erase a large portion of its daily losses but lost its recovery momentum before reaching 0.9800. As of writing, the pair was down 0.1% on a daily basis at 0.9768 versus Thursday’s closing price at 0.97903. Following the latest price action, EUR/USD remains on track to end the week flat.

The US dollar is capitalizing on the positive NFP data. Earlier in the day, the data published by the US Bureau of Labor Statistics revealed that Nonfarm Payrolls rose by 263,000 in September. This data came better than the market expectation for an increase of 250,000 and helped the dollar outperform its rival currencies. Additionally, the Unemployment Rate declined to 3.5% from 3.7%.

With the initial reaction, the US Dollar Index (DXY) jumped to a daily high of 112.82 and forced EUR/USD to drop to a weekly low of 0.9726. Week-end flows and profit-taking, however, seem to be limiting the dollar’s gains with the DXY retreating below 112.50 toward the London fix.

Wall Street’s main indexes are trading deep in negative territory, making it difficult for EUR/USD to stretch higher. The Nasdaq Composite and the S&P 500 indexes were both losing more than 2% on the day.