FOREX-Dollar up vs yen on US jobs data, holds steady vs euro
03/02/2012 at 23:54
* Strong US jobs data lifts greenback vs yen * Safe haven trade diminishes, euro gains on U.S. dollar * Euro down vs commodity currencies on euro zone crisis * Aussie dollar climbs to fresh six month high. Recasts, adds comment, updates prices By Daniel Bases NEW YORK, Feb 3 Reuters - Robust U.S. jobs data spurred investors to buy the U.S. dollar and sell yen on Friday with the rosier economic report curtailing some expectations the U.S. Federal Reserve will hold off raising interest rates until 2014The strong jobs data diminished the greenback's safe haven status as investors took on more risk. The main beneficiary was the euro where initial losses on the report were erased by the end of trade despite the overhang of Europe's sovereign debt crisis
Data from the U.S. Labor Department showed 243,000 non-farm jobs were created in January, its fastest pace in nine months, pulling the unemployment rate to an unexpected three year low of 8.3 percent
Friday's data erodes the argument for more economic stimulus by the U.S. Federal Reserve and for some investors even suggested the central bank could raise interest rates sooner than the 2014 time period suggested in recent days
"You get a couple of payrolls like this and a rate increase is back to mid-2013 and that puts you inside the two-year window where it will get priced in by the FX markets," said Greg Anderson G10 strategist at CitiFX, a division of Citigroup in New York
A separate report showing greater-than-expected expansion in the U.S. services sector in January only added to the dollar's allure.
Interest rate futures contracts expiring in April 2014 suggested a 36 percent chance of a rate hike by then, after signaling no chance before the report. Most traders saw June as the most likely month for a first rate hike. Before the report, traders saw the first hike as most likely in August 2014
While the dollar maintained its advantage against the yen and Swiss franc, the euro clawed back to the break-even point by the end of the day on greater risk tolerance, illustrated by a rally in stocks and a plunge in U.S. Treasury prices
The euro traded unchanged at $1.3145
Against the yen, the dollar rose 0.50 percent to 76.56, off of Thursday's three month low of 76.02
Japanese Finance Minister Jun Azumi said on Friday that speculative yen buying had gathered pace since last week and repeated that he was ready to act decisively to counter "one-sided" moves
However, the unresolved Greek debt restructuring left the region's currency at a deficit against the so-called commodity currencies which benefit from stronger economic growth
"Look at the euro/Aussie cross. There is no comeback there. That is what I would isolate. It is a good reflection of, well, yes the euro came back because the risk-on trade extended a little further against the U.S. dollar but not against Australia or Canada or New Zealand," said Anderson
The Australian dollar
GREECE CONCERNS Investors are still awaiting the outcome of talks between Greece and its private creditors on a debt swap
Greek officials have said repeatedly that a deal is near, and European Union Economic and Monetary Affairs Commissioner Olli Rehn reiterated on Thursday that it could be reached by the end of the week
"In the very short-term, people will be reluctant to take positions in the euro as there is a lot of announcement risk surrounding Greece," said Daragh Maher, currency strategist at HSBC in London
The euro hit a six-week high in the last week, stalling ahead of resistance at $1.3235, the 38.2 percent retracement of the euro's fall from October to January, using Reuters data
Against the Swiss franc, the euro was up 0.23 percent at 1.2075 francs
Top Swiss politicians on Friday spoke out in favor of the central bank's cap of 1.20 per euro on the Swiss franc, saying it was the bare minimum needed to cushion the economy
Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit * BridgeStation: view story .134 For more information on Top News: Reporting By Daniel Bases, Nick Olivari, Steven C. Johnson; editing by Andrea Evans and Andrew Hay daniel.bases@thomsonreuters.com1-646-223-6131Reuters Messaging: daniel.bases.reuters.com@reuters.net Currency bid prices at 4:33 p.m. EST 2133 GMT. All data taken from Reuters calculated from the levels at 4:30 p.m.2130 GMT in the previous New York session. Last US Close Pct YTD Pct 2011 Feb. 2 Change Change Close ------------------------------------------------------------- Euro/dlr
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Keywords: MARKETS FOREX