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Forex pairs in this Article » EUR/USD, GBP/USD (San Francisco) - EUR/USD was supported in the morning as Euro short rates rose due to yesterdays Draghi surprise when he wasn’t as dovish as markets had expected and had been positioned for. 1.3655/75 was the range as we moved up on leveraged dollar supply. Some are convinced that the ECB will have to combat the deflationary threat at some stage. German Factory orders came as expected -2.2 m/m and 1.9 y/y.

The NFP’s number was the main attraction though, printing 230k vs a consensus of 180k while the Unemployment Rate printed 7% vs 7.2% consensus. The Michigan consumer sentiment index was also beating expectations at 82.5 vs 76.0 consensus. However, the market was npt convinced that these numbers were strong enough for a December taper. EUR/USD has ended up on the day 1.3700, some 80 pips higher than the low and remains bid.

Sterling has been a mixed finish on the week. The pound was strong on the morning in Europe after British house prices came in on the data front better than expected last month. House prices rose at their fastest pace in more than six years in November. This has been reinforcing optimism today about the economy and expectations that interest rates are likely to rise sooner than expected. Sterling has made a high of 1.6395, and a big figure up on the low 1.6293 and now closing 1.6340.

The antipodeans have taken the dollar lower while the NZD has been outperforming. The AUD climbed back a full big figure on the US data releases, but on the knee jerk and actually finished up only relatively higher on the open AUD finishes on the handle 0.91, while the NZD reads 0.8280.

Gilts outperformed Bunds, with the 10-year spread narrowing a basis point to 104 basis points, its narrowest in over a week.
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