On Friday, the US Labor department reported that the U.S. economy added a net 163,000 nonfarm payrolls in July, far more than market expectations for a gain of 100,000 and well above June's revised figure of 64,000.
Meanwhile, the Institute for Supply Management's service-sector index also outpaced expectations last month as well.
In a report, the Institute for Supply Management said that its non-manufacturing purchasing managers' index rose to a seasonally adjusted annual rate of 52.6 in July, up from 52.1 in June.
However, the U.S. unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in the preceding month, keeping alive speculation over the possibility of further monetary stimulus from the Federal Reserve.
The better than expected NFP numbers sparked a global risk-on trading session in which investors ditched the greenback for higher-yielding currencies and equities.
At the close of European trade, France’s CAC 40 rocketed 4.38%, while Germany’s DAX 30 exploded 3.94%. The US markets ended the session in a 3 month high with a 1.9% gain on the S&P500 and 2% on the Nasdaq composite.
In the week ahead, market participants will continue to keep a close eye on developments in the euro zone, as investors continue to digest the implications of the ECB's recent decisions.
Market will also pay a close attention to the Fed Chairman, Bernanke speech today whether he will add shade some light on his further Monetary policy.
EUR/USD The euro rallied against the U.S. dollar on Friday, amid indications that European policymakers are looking at implementing moves to stem the crisis in the euro zone, while stronger-than-forecast U.S. jobs data also fuelled a broad based risk rally.