Flat dollar fails to make much ground on euro despite strong jobs data in US

The US dollar was nearly flat against the euro yesterday despite the stronger-than-expected US monthly jobs data, as markets continued to digest Thursday’s unexpectedly small stimulus from the ECB.

While analysts said the data was strong enough to confirm that the Federal Reserve would hike US interest rates this month for the first time in nearly a decade, they said it failed to fuel a dollar rally against the euro given the ECB’s decision.

“There was so much pain in the market yesterday that the willingness to act has been relatively subdued,” said Sebastien Galy of Deutsche Bank in New York.

The euro was down just 0.1% against the dollar at $1.09290.

The dollar index, which measures the greenback against a basket of six major rivals, was up 0.47% at 98.077.

Investors scrambled to unwind hefty short euro positions on Thursday after the ECB cut its deposit rate by a mere 10 basis points and extended its asset buys by six months.

That led the euro to shoot 3.1% higher against the dollar to mark its biggest one-day percentage gain in nearly seven years and its highest level in a month, at $1.0981.

“The ECB overshadowed today’s data point,” said Chris Gaffney, president of EverBank World Markets, in reference to the jobs data.