The dollar strengthened against its peers on Friday rallying to new multi-year highs on the back of very solid US employment data which caused the market to predict a rate increase by the Fed to be sooner rather than later. The Labor Department released figures which highlighted the biggest monthly increase in 3 years of 321,000 jobs in November which was well beyond expectations of an increase of 225,000.

The euro weakened against the dollar with the pair dropping to 2 year lows following the dollar’s rally on US jobs data. The euro had strengthened across the board on Thursday following remarks made by European Central Bank President Draghi detailing that there would be no introduction of additional stimulus measures for the time being and that the central bank will review its policy in the first quarter of next year.

The pound weakened against the dollar with the pair dropping to 15 month lows following the dollar’s rally. The pound was still facing some pressure from The Bank of England’s announcement on Thursday which resulted in its interest rate unchanged at 0.5% and the size of its asset purchase program remaining at 375 billion pounds.

The yen weakened against the dollar with the pair breaking its 121 handle trading at 7 year highs after the release of US jobs data. The yen still faced pressure following media reports from Thursday which stated that Prime Minister Abe’s coalition government could maintain its majority following snap elections set for December 14 which he called for in order to push through his reforms which center around a weaker yen.

The Canadian dollar weakened to more than 5 year lows against the dollar on the back of surprisingly poor data regarding Canada’s job market. Statistics Canada released figures which showed that the Canadian economy lost 10,700 jobs in November while analysts forecast an increase of 5,300 jobs. The Australian dollar weakened to its lowest level against the dollar in over 4 years following the dollar’s rally on US job data while the New Zealand dollar dropped to a 4 week low. The Reserve Bank of New Zealand will announce its policy decision on Wednesday.

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