U.S. employment probably fell for a second straight month in July as more temporary census jobs ended and private hiring remained too weak to boost a fragile economic recovery, according to a Reuters survey.
The survey of 75 economists forecast nonfarm payrolls dropped 65,000 after declining 125,000 in June. Private-sector hiring, considered a better gauge of labor market health, is seen rising 90,000 after increasing 83,000 in June.
The U.S. Labor Department will release the employment report at 08:30 a.m. (1230 GMT)
The unwinding of hiring for the decennial census was also a drag on employment in June and analysts expect the distortion to continue through August. According to government data, temporary census jobs fell by 144,000 between the June and July survey periods for the employment report.
"It (the report) would be moving in the right direction, but this is still a much weaker jobs recovery than we thought would occur at this point," said Marisa Di Natale, a director at Moody's Economy.com in West Chester, Pennsylvania.
"There is a lot of weak economic news out there and we need a turnaround in a bunch of different indicators to really confirm that the economic recovery is on a firmer footing."
Job growth has taken a step back after fairly strong gains between February and April, putting in jeopardy the economy's recovery from its worst downturn since the 1930s.
Friday's employment report is also expected to show the unemployment rate rising to 9.6 percent from 9.5 percent in June.
Growing unease over the health of the economy is weighing on President Barack Obama's popularity and hurting the Democratic Party's prospects of keeping control of Congress in November's mid-term elections.
FED WATCHING LABOR MARKET
The state of the labor market is one of the factors that will determine the timing of the Federal Reserve's first interest rate rise since reducing overnight lending rates to near zero in December 2008.
Fed Chairman Ben Bernanke has said the U.S. central bank could take steps to further ease monetary policy if the recovery were to falter. The central bank holds its next policy-setting meeting on Tuesday.
Economic growth slowed to a 2.4 percent annual rate in the second quarter after expanding at a 3.7 percent pace in the first three months of this year.
Despite the tepid private sector jobs growth, the pace of layoffs has moderated significantly from the first quarter of last year, when employers were culling an average of 752,000 jobs a month.
Analysts said the pullback in hiring was a reflection of the end of some government stimulus programs, including a popular homebuyer tax credit, as well as the European sovereign debt crisis, which hurt both business and consumer confidence.
In the face of sluggish domestic demand, businesses were also opting to invest in equipment and technology to boost productivity rather than increase their workforces, they said.
"The demand picture hasn't strengthened enough for them to take on more workers, eventually that will change," said Jay Feldman, an economist at Credit Suisse in New York.
"As the recovery matures they will have to have more workers, we have not reached that point yet."
Last month, employment gains in the dominant service sector likely continued after June's increase of 91,000. Analysts will be watching temporary help services, which is seen as a harbinger of future permanent hiring, after job gains slowed somewhat in June.
Payrolls in the goods-producing sector probably fell for a second straight month in July, reflecting mining layoffs related to a moratorium on deep water oil drilling and home construction job losses.
However, manufacturing employment likely increased again in July. The sector is leading the economic recovery, which started in the second half of 2009. The Institute for Supply Management's gauge of manufacturing employment rose in July after pulling back the prior month.
State and local governments, struggling with huge budget deficits, likely purged more workers last month. Analysts reckon government payrolls could shrink by as much as 175,000 in July after dropping 208,000 in June.
They will also watch the average workweek for clues on the health of the labor market after weekly hours slipped in June. The workweek is expected to have remained unchanged at 34.1 hours in July.
Source:Reuter.com
Thursday, August 5, 2010
Nikkei falls and dollar weak as U.S. job data looms
A woman looks at an electronic board displaying falls in various market indices around the world outside a brokerage in Tokyo June 23, 2010.
Credit: Reuters/Issei Kato
HONG KONG |
HONG KONG (Reuters) - The dollar was on the defensive and Japan stocks fell after weak U.S. jobless claims figures heightened worries that Friday's payroll data could paint a bleak picture of the U.S. economic recovery."Growing worries about employment conditions in the United State are keeping investors on the sidelines ahead of the jobs data, in addition to concerns about U.S. consumer spending," said Fumiyuki Nakanishi, manager at SMBC Friend Securities.
Data overnight showed new U.S. claims for unemployment benefits unexpectedly rose last week to the highest level since early April, pushing stocks on Wall Street lower.
Japan's Nikkei .N225 fell 0.3 percent as traders closed positions ahead of the weekend, but is poised to end the week slightly higher, supported by solid earnings from companies including Toyota Corp (7203.T).
Strong corporate earnings have supported equity markets in recent weeks despite a string of disappointing U.S. data, but the quarterly reporting period is now nearing an end.
So far this year the Nikkei is down nearly 9 percent, hurt by worries that the global recovery is running out of steam and by a stronger yen, which is inching toward a 15-year high against the dollar.
The MSCI index of Asian stocks outside of Japan slipped 0.2 percent, but looked set to gain 2 percent on the week and is barely in positive territory for the year.
According to a Reuters poll, the U.S. Labor Department is expected to report at 8:30 a.m. EDT that nonfarm payrolls fell 65,000 last month after declining 125,000 in June, as temporary workers hired to conduct the decennial census were let go. Private sector payrolls are seen rising a modest 90,000 and the unemployment rate is expected to climb to 9.6 percent from 9.5 percent in June.
DOLLAR, BONDS
The dollar index .DXY stood at 80.80, easing slightly from late U.S. trade and near its Tuesday low of 80.469, its lowest since mid-April.
Its 14-day relative strength index is below 30, indicating a heavily oversold position. With the mood already so bearish, some traders believe a result anywhere close to forecasts would likely be a relief and could see the dollar rally.
Against the Japanese currency, the dollar traded at 85.82 yen, one yen above its November low of 84.82 yen, a break of which would take it to a 15-year low.
Further yen gains could stir talk of yen-selling intervention by Japanese authorities, though many market players think Tokyo is unlikely to pull the trigger at this time.
"The market is focusing on the outlook for the U.S. economy. If the dollar breaks below the November low, it could enter a whole new world," said Minoru Shioiri, chief manager of forex trading at Mitsubishi UFJ Morgan Stanley Securities.
Japanese government bonds gave up early gains in jittery trade ahead of the U.S. data. The benchmark 10-year yield fell below 1 percent earlier in the week.
Gold edged up 30 cents to $1,193.40 an ounce and was on track for its biggest weekly gain since late June as the dollar remained mired near multi-week lows.
Crude oil futures were little changed near $82 a barrel.
U.S. wheat futures surged as much as 4.8 percent, after settling up at the permitted daily maximum for the first time in two years on Thursday, as Russia said it would temporarily halt grain shipments because of a drought cutting production.
US Postal Service loses $3.5 bln in third quarter
The U.S. Postal Service reported a quarterly net loss of $3.5 billion on Thursday and said it will likely have a cash shortfall going into 2011.
The agency, which delivers nearly half the world's mail, has reported net losses in 14 of the last 16 fiscal quarters.
Revenue in the third quarter that ended June 30 fell $294 million to $16 billion from a year ago, while expenses were $789 million higher at $19.5 billion, due largely to higher workers' compensation costs and retiree health benefits.
"Given current trends, we will not be able to pay all 2011 obligations," said Joseph Corbett, the agency's chief financial officer.
Cash flow seems on track to handle 2010 operations, Corbett said, but it is uncertain whether sufficient liquidity will be in place for 2011 after the agency must make a $5.5 billion payment on Sept. 30 to prefund retiree health benefits.
"It is clear that a liquidity problem is looming and must be addressed through fundamental changes requiring legislation and changes to contracts," Corbett said.
A U.S. law requires annual payments through 2016 to prefund the health benefits, a requirement not placed on any other government agency. The Postal Service is pushing for legislation that would restructure this payment schedule.
Congress lowered the amount the Postal Service was obligated to pay to prefund benefits in 2009, but there has been no indication that will happen again this year.
To remain solvent, the Postal Service is also seeking Congressional approval to cut Saturday service, and has proposed price hikes for 2011 that require approval from the Postal Regulatory Commission. [ID:nN06102566]
The Affordable Mail Alliance, consisting of hundreds of small businesses, charities, and other customers of the Postal Service, contested the service's predictions of a cash shortfall.
The group said certain filings suggest the agency will have $1.3 billion in cash after making the benefits payment.
"Unfortunately, the Postal Service seems to be attempting to justify their proposed rate hikes of ten times the rate of inflation - a move that would drive away more consumers and worsen the financial situation they're highlighting in this report," said Tony Conway, a spokesman for the group and executive director of the Alliance of Nonprofit Mailers.
SHRINKING MAIL VOLUME
The Postal Service faces a continued downward spiral in mail volume, as more Americans communicate by email and electronically pay their bills.
Some 40.9 billion pieces of mail were delivered in the third quarter that ended June 30, down 1.7 percent from the same period a year ago.
While the global recession sparked unprecedented drops in mail volume, the increased popularity of email and competition from FedEx Corp (FDX.N), United Parcel Service Inc (UPS.N) and other delivery services have long cut into the agency's mail volume.
Postmaster General John Potter said the Postal Service is expected to achieve around $3 billion in cost reductions in 2010 through cuts in work hours to match declining volumes and other initiatives, but more is needed to secure the agency's fiscal stability.
"It also will require that the Postal Service gain flexibility within the law to move toward five-day delivery, to adjust our network as needed, to develop new products the market demands, and to work with our unions to meet the challenges ahead," he said.
The agency, which delivers nearly half the world's mail, has reported net losses in 14 of the last 16 fiscal quarters.
Revenue in the third quarter that ended June 30 fell $294 million to $16 billion from a year ago, while expenses were $789 million higher at $19.5 billion, due largely to higher workers' compensation costs and retiree health benefits.
"Given current trends, we will not be able to pay all 2011 obligations," said Joseph Corbett, the agency's chief financial officer.
Cash flow seems on track to handle 2010 operations, Corbett said, but it is uncertain whether sufficient liquidity will be in place for 2011 after the agency must make a $5.5 billion payment on Sept. 30 to prefund retiree health benefits.
"It is clear that a liquidity problem is looming and must be addressed through fundamental changes requiring legislation and changes to contracts," Corbett said.
A U.S. law requires annual payments through 2016 to prefund the health benefits, a requirement not placed on any other government agency. The Postal Service is pushing for legislation that would restructure this payment schedule.
Congress lowered the amount the Postal Service was obligated to pay to prefund benefits in 2009, but there has been no indication that will happen again this year.
To remain solvent, the Postal Service is also seeking Congressional approval to cut Saturday service, and has proposed price hikes for 2011 that require approval from the Postal Regulatory Commission. [ID:nN06102566]
The Affordable Mail Alliance, consisting of hundreds of small businesses, charities, and other customers of the Postal Service, contested the service's predictions of a cash shortfall.
The group said certain filings suggest the agency will have $1.3 billion in cash after making the benefits payment.
"Unfortunately, the Postal Service seems to be attempting to justify their proposed rate hikes of ten times the rate of inflation - a move that would drive away more consumers and worsen the financial situation they're highlighting in this report," said Tony Conway, a spokesman for the group and executive director of the Alliance of Nonprofit Mailers.
SHRINKING MAIL VOLUME
The Postal Service faces a continued downward spiral in mail volume, as more Americans communicate by email and electronically pay their bills.
Some 40.9 billion pieces of mail were delivered in the third quarter that ended June 30, down 1.7 percent from the same period a year ago.
While the global recession sparked unprecedented drops in mail volume, the increased popularity of email and competition from FedEx Corp (FDX.N), United Parcel Service Inc (UPS.N) and other delivery services have long cut into the agency's mail volume.
Postmaster General John Potter said the Postal Service is expected to achieve around $3 billion in cost reductions in 2010 through cuts in work hours to match declining volumes and other initiatives, but more is needed to secure the agency's fiscal stability.
"It also will require that the Postal Service gain flexibility within the law to move toward five-day delivery, to adjust our network as needed, to develop new products the market demands, and to work with our unions to meet the challenges ahead," he said.
Dollar steadies, commodity currencies firm
The dollar steadied on Thursday after it enjoyed a rare rally the previous day when U.S. data beat expectations and sparked a bout of short-covering, although the overall mood remains bearish ahead of a key payrolls report.
Against the yen, the dollar was down 0.1 percent on the day at 86.19 yen JPY=, having bounced from an eight-month low of 85.32 yen hit on Wednesday.
Traders said the greenback's ability to hold above the psychologically and technically key 85 yen level lightened the risk of dollar/yen dropping to a 15-year low below the November trough at 84.82 yen, at least until the monthly U.S. jobs data, which is seen setting the dollar's near-term direction.
A decline beyond the November milestone could open the way for the greenback to slide to an all-time low below 80 yen, hit 15 years ago, traders said.
Dealers are wary that a tumble to a 15-year low would finally prompt the Ministry of Finance into taking action on the currency's strength, which is hurting Japanese exports, shares and the export-dependent economy.
"Players feel they have sold the dollar a bit too much before the U.S. jobs data, and are buying back the currency a little," said a senior trader at a Japanese trust bank.
But the trader said the dollar remained on a downward trend in the longer term, weighed by persistent speculation that the Federal Reserve may further relax its monetary policy to help the U.S. economic recovery which is feared to be losing steam.
Also, the dollar's growing role as a carry trade funding currency points to a further slide. [ID:nSGE6730DO]
Falling U.S. Treasury yields are also playing a part in the dollar's weakness.
The positive correlation between U.S. and Japanese two-year yield spreads, which have been narrowing, and the dollar/yen rate has strengthened to its highest since the period just after the collapse of Lehman Brothers in 2008.
Heavy Japanese buying has helped bring down Treasury yields, bond traders said.
Data from Japan's Ministry of Finance showed on Thursday that Japanese investors have been net buyers of overseas debt -- believed to be mostly U.S. Treasuries -- for 12 straight weeks. Their total net buying during the period reached 11.3 trillion yen ($131 billion) against a total net buying of 12.1 trillion yen in the whole of 2009.
Meanwhile, Japanese investors' Treasury purchases have had little visible impact on dollar/yen rates as big overseas debt buyers, such as Japanese insurers, are now hedging against volatility in exchange rates, said Sumino Kamei, senior analyst at Bank of Tokyo-Mitsubishi UFJ.
The dollar index .DXY edged up 0.1 percent to 80.930, putting it back above its 200-day moving average at 80.768. However, it still needs to get past 81.650 to break the bear trend of the past seven weeks, and otherwise risks a fall to its April low of 80.031.
The euro was barely moved from late U.S. trade at $1.3159 EUR=, having slid from a three-month peak of $1.3262 struck on Tuesday. Traders reported good support in the $1.3140/50 area and more at $1.3107.
COMMODITY CURRENCIES FIRM
One standout was strength in currencies leveraged to world growth and commodity prices, such as the Australian and Canadian dollars, suggesting a lightening of the recent gloom over the global outlook.
The Canadian dollar extended gains against the greenback, while the Australian dollar dipped but hovered near a three-month high hit the previous day.
The catalyst was an unexpected improvement in the ISM index of the U.S. service sector which nudged up to 54.3 in July, pointing to a faster rate of expansion. [ID:nTOPMACRO]
"So not only is the services sector -- the vast bulk of most modern economies -- expanding, it is doing so at a faster pace," said Adam Carr, a senior economist at broker ICAP.
That helped to counter talk that the Fed might take further steps into quantitative easing at its policy meeting next week and pulled Treasury yields up from record lows [US/].
"Commodities are telling us that this global recovery has reasonable momentum," said Carr, noting iron ore prices had risen around 20 percent in the past month, while copper was up 16 percent and wheat up 40 percent.
That helped to lift the Australian dollar to a three-month high at $0.9184 AUD=D4 on Wednesday, while the U.S. dollar slid the previous day to its lowest against the Canadian currency in six weeks at C$1.0163 CAD=D4.
On Thursday, the Aussie dipped 0.1 percent to $0.9161. The U.S. dollar was down 0.1 percent at C$1.0165.
Bucking the trend was the New Zealand dollar, which took a spill early on Thursday after local jobless data proved far weaker than expected, prompting markets to scale back expectations for more interest rate rises this year. [ID:nSGE6720PV]
The currency fell 0.7 percent to $0.7300 NZD=D4.
The European Central Bank and the Bank of England hold meetings later on Thursday, although no policy changes are expected. [ID:nTOPNOW1] (Additional reporting by Wayne Cole in Sydney and Hideyuki Sano in Tokyo
Against the yen, the dollar was down 0.1 percent on the day at 86.19 yen JPY=, having bounced from an eight-month low of 85.32 yen hit on Wednesday.
Traders said the greenback's ability to hold above the psychologically and technically key 85 yen level lightened the risk of dollar/yen dropping to a 15-year low below the November trough at 84.82 yen, at least until the monthly U.S. jobs data, which is seen setting the dollar's near-term direction.
A decline beyond the November milestone could open the way for the greenback to slide to an all-time low below 80 yen, hit 15 years ago, traders said.
Dealers are wary that a tumble to a 15-year low would finally prompt the Ministry of Finance into taking action on the currency's strength, which is hurting Japanese exports, shares and the export-dependent economy.
"Players feel they have sold the dollar a bit too much before the U.S. jobs data, and are buying back the currency a little," said a senior trader at a Japanese trust bank.
But the trader said the dollar remained on a downward trend in the longer term, weighed by persistent speculation that the Federal Reserve may further relax its monetary policy to help the U.S. economic recovery which is feared to be losing steam.
Also, the dollar's growing role as a carry trade funding currency points to a further slide. [ID:nSGE6730DO]
Falling U.S. Treasury yields are also playing a part in the dollar's weakness.
The positive correlation between U.S. and Japanese two-year yield spreads, which have been narrowing, and the dollar/yen rate has strengthened to its highest since the period just after the collapse of Lehman Brothers in 2008.
Heavy Japanese buying has helped bring down Treasury yields, bond traders said.
Data from Japan's Ministry of Finance showed on Thursday that Japanese investors have been net buyers of overseas debt -- believed to be mostly U.S. Treasuries -- for 12 straight weeks. Their total net buying during the period reached 11.3 trillion yen ($131 billion) against a total net buying of 12.1 trillion yen in the whole of 2009.
Meanwhile, Japanese investors' Treasury purchases have had little visible impact on dollar/yen rates as big overseas debt buyers, such as Japanese insurers, are now hedging against volatility in exchange rates, said Sumino Kamei, senior analyst at Bank of Tokyo-Mitsubishi UFJ.
The dollar index .DXY edged up 0.1 percent to 80.930, putting it back above its 200-day moving average at 80.768. However, it still needs to get past 81.650 to break the bear trend of the past seven weeks, and otherwise risks a fall to its April low of 80.031.
The euro was barely moved from late U.S. trade at $1.3159 EUR=, having slid from a three-month peak of $1.3262 struck on Tuesday. Traders reported good support in the $1.3140/50 area and more at $1.3107.
COMMODITY CURRENCIES FIRM
One standout was strength in currencies leveraged to world growth and commodity prices, such as the Australian and Canadian dollars, suggesting a lightening of the recent gloom over the global outlook.
The Canadian dollar extended gains against the greenback, while the Australian dollar dipped but hovered near a three-month high hit the previous day.
The catalyst was an unexpected improvement in the ISM index of the U.S. service sector which nudged up to 54.3 in July, pointing to a faster rate of expansion. [ID:nTOPMACRO]
"So not only is the services sector -- the vast bulk of most modern economies -- expanding, it is doing so at a faster pace," said Adam Carr, a senior economist at broker ICAP.
That helped to counter talk that the Fed might take further steps into quantitative easing at its policy meeting next week and pulled Treasury yields up from record lows [US/].
"Commodities are telling us that this global recovery has reasonable momentum," said Carr, noting iron ore prices had risen around 20 percent in the past month, while copper was up 16 percent and wheat up 40 percent.
That helped to lift the Australian dollar to a three-month high at $0.9184 AUD=D4 on Wednesday, while the U.S. dollar slid the previous day to its lowest against the Canadian currency in six weeks at C$1.0163 CAD=D4.
On Thursday, the Aussie dipped 0.1 percent to $0.9161. The U.S. dollar was down 0.1 percent at C$1.0165.
Bucking the trend was the New Zealand dollar, which took a spill early on Thursday after local jobless data proved far weaker than expected, prompting markets to scale back expectations for more interest rate rises this year. [ID:nSGE6720PV]
The currency fell 0.7 percent to $0.7300 NZD=D4.
The European Central Bank and the Bank of England hold meetings later on Thursday, although no policy changes are expected. [ID:nTOPNOW1] (Additional reporting by Wayne Cole in Sydney and Hideyuki Sano in Tokyo
Dollar stuck near 3-½ mth low as jobs data looms
The dollar was on the defensive near a 3-½ month low against a basket of currencies after weak U.S. jobless claims figures heightened worries that Friday's payroll data could paint a bleak picture of the U.S. economic recovery.
A weak reading could fuel talk that the Federal Reserve may consider additional easing steps as early as next week, which could put pressure on the dollar particularly against the yen, given the pair's recent strong correlation with U.S. Treasury yields.
"Unless employment improves, housing demand won't improve and consumption won't grow. The U.S. economy could hit a lull," said Kakuya Kojoh, head of the securities department at Nissan Century Securities.
Against the Japanese currency, the dollar traded at 86.08 yen JPY=, up 0.3 percent on the day and more than one yen above its November low of 84.82 yen, a break of which would take it to a 15-year low.
Some covered short dollar positions against the yen before the U.S. employment data, traders said.
"The market is focusing on the outlook for the U.S. economy. If the dollar breaks below the November low, it could enter a whole new world," said Minoru Shioiri, chief manager of forex trading at Mitsubishi UFJ Morgan Stanley Securities.
Traders said there was a sizable volume of knockout option positions below 85 yen, which suggests that the dollar's fall could become more volatile if it does step into those price levels.
While further yen gains could stir talk of yen-selling intervention by Japanese authorities, many market players think Tokyo is unlikely to pull the trigger at this time. [ID:nTOE672023]
For now the dollar has some support at 85.32 yen, its low on Wednesday.
The euro fetched $1.3179 EUR=, keeping much of Thursday's gain of about 0.3 percent. Now not far off its three-month high of $1.3262 hit earlier in the week, the currency has immediate support around $1.3105-25, a previous resistance area.
U.S. JOBS IN FOCUS
The dollar index .DXY stood at 80.84, little changed from late U.S. trade and near its Tuesday low of 80.469, its lowest since mid-April.
The index, however, appears to have some support around 80.50, having managed to hold near its 200-day moving average, which stood at 80.792 on Friday.
Its 14-day relative strength index is below 30, indicating a heavily oversold position.
Some traders therefore see a chance of a rebound in the dollar if the payrolls data, due at 1230 GMT, provides a positive surprise or even comes close to market expectations.
"Everyone is short the dollar. That means the impetus for the dollar to rebound on better-than-expected jobs data would be much greater than that to extend losses on poor data," said Tsutomu Soma, senior manager of the foreign securities department at Okasan Securities.
Economists forecast a total job loss of 65,000 in July, following a fall of 125,000 in June.
On Thursday, the U.S. Labor Department reported that the number of Americans filing for initial jobless benefits rose 19,000 to 479,000 last week, the highest level since early April, despite economists' forecast for a fall.
The Australian dollar erased earlier losses, after the Reserve Bank of Australia stuck to its forecasts for domestic growth to accelerate to 4 percent over the next two years in its quarterly statement.
The Aussie AUD=D4 changed hands at $0.9148, nearly flat on the day, and 0.4 percent below its three-month peak of $0.9184 hit on Wednesday.
The Australian currency stayed near a 2-½ month high against the New Zealand dollar, which continued to suffer from Thursday's poor New Zealand job data.
The Aussie fetched NZ$1.2571 AUDNZD=R, after having risen to around NZ$1.2590 on Thursday.
The kiwi slipped 0.3 percent against the U.S. dollar to $0.7276 NZD=D4. (Addtional reporting by Rika Otsuka)
Source:Reuter
A weak reading could fuel talk that the Federal Reserve may consider additional easing steps as early as next week, which could put pressure on the dollar particularly against the yen, given the pair's recent strong correlation with U.S. Treasury yields.
"Unless employment improves, housing demand won't improve and consumption won't grow. The U.S. economy could hit a lull," said Kakuya Kojoh, head of the securities department at Nissan Century Securities.
Against the Japanese currency, the dollar traded at 86.08 yen JPY=, up 0.3 percent on the day and more than one yen above its November low of 84.82 yen, a break of which would take it to a 15-year low.
Some covered short dollar positions against the yen before the U.S. employment data, traders said.
"The market is focusing on the outlook for the U.S. economy. If the dollar breaks below the November low, it could enter a whole new world," said Minoru Shioiri, chief manager of forex trading at Mitsubishi UFJ Morgan Stanley Securities.
Traders said there was a sizable volume of knockout option positions below 85 yen, which suggests that the dollar's fall could become more volatile if it does step into those price levels.
While further yen gains could stir talk of yen-selling intervention by Japanese authorities, many market players think Tokyo is unlikely to pull the trigger at this time. [ID:nTOE672023]
For now the dollar has some support at 85.32 yen, its low on Wednesday.
The euro fetched $1.3179 EUR=, keeping much of Thursday's gain of about 0.3 percent. Now not far off its three-month high of $1.3262 hit earlier in the week, the currency has immediate support around $1.3105-25, a previous resistance area.
U.S. JOBS IN FOCUS
The dollar index .DXY stood at 80.84, little changed from late U.S. trade and near its Tuesday low of 80.469, its lowest since mid-April.
The index, however, appears to have some support around 80.50, having managed to hold near its 200-day moving average, which stood at 80.792 on Friday.
Its 14-day relative strength index is below 30, indicating a heavily oversold position.
Some traders therefore see a chance of a rebound in the dollar if the payrolls data, due at 1230 GMT, provides a positive surprise or even comes close to market expectations.
"Everyone is short the dollar. That means the impetus for the dollar to rebound on better-than-expected jobs data would be much greater than that to extend losses on poor data," said Tsutomu Soma, senior manager of the foreign securities department at Okasan Securities.
Economists forecast a total job loss of 65,000 in July, following a fall of 125,000 in June.
On Thursday, the U.S. Labor Department reported that the number of Americans filing for initial jobless benefits rose 19,000 to 479,000 last week, the highest level since early April, despite economists' forecast for a fall.
The Australian dollar erased earlier losses, after the Reserve Bank of Australia stuck to its forecasts for domestic growth to accelerate to 4 percent over the next two years in its quarterly statement.
The Aussie AUD=D4 changed hands at $0.9148, nearly flat on the day, and 0.4 percent below its three-month peak of $0.9184 hit on Wednesday.
The Australian currency stayed near a 2-½ month high against the New Zealand dollar, which continued to suffer from Thursday's poor New Zealand job data.
The Aussie fetched NZ$1.2571 AUDNZD=R, after having risen to around NZ$1.2590 on Thursday.
The kiwi slipped 0.3 percent against the U.S. dollar to $0.7276 NZD=D4. (Addtional reporting by Rika Otsuka)
Source:Reuter
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