Dollar gains ahead of US jobs data

Dollar gains ahead of US jobs data
Friday, April 04 07:38:05

(BizWorld)

The dollar gained against major currencies in overnight trade in Asia, as investors braced themselves for US jobs data later today.

In Singapore this morning, the euro was at USD 1.5653, down from USD 1.5662 in Sydney earlier.
The dollar was trading at 102.62 yen, up from 102.32 yen in Sydney this morning.


'The U.S. payrolls have kept many investors sidelined, exaggerating volatility in the last two sessions -- we expect tight ranges in Asia ahead of the data,' said Andrew Spencer at Thomson IFR.

Market consensus forecasts are for a 50,000 drop in non-farm jobs and a 5 percent unemployment rate compared with February's 63,000 job losses and a 4.8 percent unemployment rate.

Weekly U.S. jobless claims surging to a two-and-a-half year high of 407,000 suggest the job losses will be greater than expected, but there is a chance the actual job losses might be lower than expected given the mixed data that came out of the U.S. this week, said Tim Condon, a currency strategist at ING Financial Markets in Singapore.

Still, Condon said investors are reluctant to swing the dollar either way until the jobs data are out.

The dollar has bounced off lows in recent weeks as investor confidence gradually returned to financial markets after the rescue of Bear Stearns and recapitalization efforts at other global investment banks like UBS and Lehman Brothers, he said.

'The Fed seems to have removed the panicking in the financial markets,' Condon said.

But investor focus shifted back to monitoring economic data releases, making them reluctant to push the dollar higher until positive indicators emerge from the United States, he said.

Spencer at Thomson IFR said the dollar will continue to struggle against the euro.

'Downside progress (for the euro) will always be tough, as reserve diversification is ongoing and the U.S. economy remains soft,' he said.

Spencer said Japanese demand for offshore investments has kept the yen soft this week and will continue as long as the equity markets are stable.

This morning the euro was making

USD 1.5653 Yen 160.62 Sfr 1.5851 £ 0.7847

Copyright: Thomson Financial

Frombusinessworld.ie