Topic: U.S. Dollar

The euro fell on Friday after the leader of the far-right party in Greece’s coalition declined to back a bailout agreement, again raising concerns about the risk of a chaotic default and pushing market sentiment from recent optimism to pessimism.

Gold prices slipped in Europe on Friday as the euro eased from a two-month high, coming under pressure as the optimism sparked by Greece’s agreement of the austerity measures it needs in order to receive a second rescue package dissipated.

Gold futures rose as the euro rallied to a fresh two-month high against the dollar after Greece clinched a deal with European Union and IMF leaders needed to avoid a messy default.

The euro rose to a fresh two-month high against the dollar on Thursday as Greek leaders clinched a deal on reforms needed to avoid a disorderly default and Europe's central bank chief flagged tentative improvement in the euro zone economy.

Gold fell almost 1 percent on Wednesday on new worries about Europe's economy and as technical resistance prompted investors to take profits after the previous session's rally.

The euro rose to a two-month high versus the dollar on Wednesday on optimism Greek leaders are nearing a deal to secure a second bailout and avoid a messy default, though analysts were skeptical of fresh gains with the deal becoming priced in.

Gold prices bounced back into positive territory on Tuesday, paring earlier losses in line with a rallying euro after a Greek official said the government is drafting an agreement on a second bailout.

Japan will not rule out taking any measures to battle speculative moves in currency markets, Finance Minister Jun Azumi said on Tuesday, after data showed Tokyo spent roughly 1 trillion yen ($13 billion) in November last year on intervention it had not previously announced.

The euro rallied across the board on Tuesday, hitting an eight-week high against the dollar on optimism that Greece is about to agree on a bailout deal that will enable it to avoid a messy default.

Gold prices slipped in Europe on Monday, extending the previous session's price drop, as concerns over the unresolved Greek bailout lifted the dollar, and a better U.S. economic outlook added to continued last session's bullion profit taking.

Though the Greek coalition parties have yet to approve a new bailout to avoid a March default, the euro lifted slightly as the Greek government agreed to demands by rescue creditors to cut 15,000 jobs in the public sector.

Gold fell 1 percent on Friday, its biggest one-day loss in over a month, after encouraging U.S. payrolls data smashed hopes of extra stimulus from the Federal Reserve, which had been priced into bullion's recent rally.

The dollar extended gains against the yen and swung wildly against the euro in volatile trade on Friday after a report showed a larger-than-expected rise of 243,000 jobs in U.S. nonfarm payrolls in January.

Gold rose to a two-month high on Thursday on a larger-than-expected fall in new U.S. claims for unemployment benefits, but analysts said bullion could pull back if Friday's U.S. jobs report disappoints.

Friday's January U.S. jobs report, if strong, is expected to lead to dollar selling as this would indicate a stronger economy and therefore siphon cash away toward commodities and stocks.