Euro hovers near 5-week high, dollar edges up ahead of US NFP report

Madrid-Spain (Dec 6)  The euro steadied against the U.S. dollar in Europe Friday, hovering near five-week high as the European Central Bank (ECB) in their December policy meeting gave no fresh indication that it would ease policy anytime soon. The central bank, voiced growing optimism the euro-area block will return to growth, lifting its growth forecast for 2014 by 0.1 percentage point to 1.1% and predicted 1.5% growth in 2015. However, the ECB lowered inflation forecasts; inflation is expected to be at 1.3% in 2015 following annual consumer-price gains of 1.4% this year.

The common currency last stood at $1.36660 in Friday, having climbed more than 0.5 percent on Thursday to $1.3677 , a level not seen since October 31 . Against the yen, euro edged up to 139.617, but struggled to break above a five-year peak of 140.03 set earlier in the week. Pound edged higher on Friday, supported by U.K. Chancellor of the Exchequer George Oborne announcement, where he said in his Autumn Forecast Statement, that "Britain`s economic plan is working", and he raised growth forecasts to 1.4% this year and 2.4% in 2014. GBPUSD hit a session high at 1.63638, after which the pair fell to consolidated at 1.63555, from an opening of 1.63329. The dollar edged higher Friday, hovered near a five-week low paring its losses from the previous session as markets braced for the release of November's U.S. jobs report, due later in the day following encouraging growth data.

Further downside for the greenback hinges on how the U.S. non-farm payrolls data due later on Friday turns out. Analysts expect the U.S. economy to have created 180,000 jobs in November, following 204,000 in the previous month. While, any upside surprise will no doubt keep alive expectations the Federal Reserve may start to scale back its bond-buying stimulus program at the December meeting, bolstering the dollar.

The Commerce Department said U.S. gross domestic product increased by an upwardly revised 3.6 percent in the third quarter compared to the initial estimate of 2.8 percent growth. a separate report released by the Labor Department was likely impacted by the Thanksgiving Day holiday. The report said initial jobless claims fell to 298,000, a decrease of 23,000 from the previous week`s revised figure of 321,000. The dollar index stood at 80.32, after opening at 80.30, staying near a five-week low of 80.231 set on Thursday.

Meanwhile, after strengthening Thursday, the Japanese yen USDJPY slid back lower Friday, with the dollar rising to ¥102.168 from an opening of ¥101.767. The pair so far recorded a session high of ¥102.211 and a session low of ¥101.622.