Dollar Flat Against Yen, Euro Ahead of Jobs Data

 
   By Hiroyuki Kachi 
 

        The dollar was almost flat against the yen and the euro in quiet Asian trade Thursday, with investors avoiding taking strong positions ahead of big events such as U.S. jobs data and the election in the U.K.
        Around 0450 GMT, the dollar was at Y119.49, compared with Y119.47 late Wednesday in New York. The euro was at $1.1343 from $1.1348, while the common currency was at Y135.54 from Y135.57.
        The greenback was trapped in a tight range during the Asian session, as dealers in Tokyo returned from Japan's Golden week extended holiday period to find there is no immediate need to go ahead with taking any major action.
        "It's difficult to take action ahead of major events," said Kyosuke Suzuki, head of FX and money market sales department at Societe Generale.
        Among upcoming events, investors are closely monitoring April's non-farm payrolls report from the Labor Department scheduled Friday, as well as weekly jobless claims later Thursday, to get clues that a soft patch driven by temporary factors since earlier this year in the U.S. still remains pervasive in the second quarter.
        Mr. Suzuki said expectations are high for a rebound in jobs figures from a much weaker-than-expected jobs report a month ago. That had already prompted investors to believe the Federal Reserve will put off any interest-rate increases and ti scale down the dollar exposure.
        Even assuming surprisingly strong jobs data it's hard to assume investors will become confident about a rate increase in September, which will help limit the stock market's downside risk, said Mr. Suzuki.
        Rather, "the possibility of (the dollar) reaching the Y121 mark can't be ruled out," if impressive numbers comfortably exceed the market consensus of 230,000 new jobs created in April. Since the dollar already hit Y120.51 this week, there may now be less resistance capping the upside, he said.
        Among major currencies, the U.S. dollar and the yen were among weakest since Friday last week, making the dollar-yen trading pair to remain rangebound, said J.P. Morgan in a morning note.
        But "the tide of the dollar's weakness strengthened in past several days, giving the greenback to its lowest since Feb. 26 against the euro. The dollar in terms of its effective exchange rate, a weighted average of the exchange rate against the currencies of its trading partners, also fell to the weakness since Feb. 4.
        But the dollar was slightly stronger against its peers Thursday. The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.09% at 84.93.
        Among other currency pairs, the Australian dollar briefly hit as low as $0.7925 and Y94.68, respectively before bouncing back later in the session on short-covering.
        The Aussie hit these lows following the release of Australia's unemployment rate, which rose to a seasonally adjusted 6.2% in April from March. The new jobless rate, up from 6.1%, was in line with what economists had been expecting.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        May 07, 2015 01:38 ET (05:38 GMT)

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