EUR/USD: Euro Slips After Brief Rise to $1.09 as US Dollar Attracts Risk-Averse Traders

Stocks pared gains Thursday and money trickled into dollar in search of safety amid some mild market jitters.

• The EURUSD pair extended losses from Thursday into early Friday deals with the euro going for about 50 pips less to the dollar. In other words, the exchange rate dropped from $1.09 to levels near $1.0850. Currency speculators are cautious heading into the weekend and have turned to the safe-haven allure of the greenback. On the other hand, risk assets like stocks lost some steam and finished Thursday lower.
• Risk aversion appears to be the name of the game after days of record-setting action for US indexes. The Dow Jones Industrial Average hit 40,000 for the first time before markets got the scaries and dumped the 30-stock Wall Street favorite. Instead, money managers flocked to the US dollar, lifting its valuation across the board. The USD/JPY was advancing for a second day in a row today, reaching toward ¥156.00.
• Bond yields have likely helped trigger the run to safety. The 10-year yield, which fine-tunes the mortgage and credit card interest rates, snapped a three-day decline and closed higher at 4.376%. Also, initial jobless claims, a proxy for weekly layoffs, slipped to 222,000 from 232,000 in the previous week, indicating that the labor market may be finding its feet again after a brief dip.