WSJ:WORLD FOREX: Dollar Flat Vs Rivals Ahead Of US Jobs Report
--Investors stay on sidelines ahead of the September U.S. non-farm payrolls report due at 1230 GMT
--Greenback could fall vs most rivals if data meet or exceed expectations
--ECB, BOE moves seen as weighing on safe-haven dollar by improving risk appetite
By Andrew Monahan
Of DOW JONES NEWSWIRES
TOKYO (Dow Jones)--The dollar barely budged against its rivals in Asia Friday as investors stayed largely on the sidelines ahead of a key monthly U.S. jobs report due later in the global day.
The safe-haven greenback could struggle against most currencies if the non-farm payrolls report for September meets or exceeds expectations, analysts said. Such a boost to investor confidence could eat into demand for low-risk, low-yield currencies like the dollar and yen.
Market confidence is on the mend after the European Central Bank declined to lower interest rates Thursday, despite some speculation that President Jean-Claude Trichet would use his final decision as central bank chief to cut rates, which would have sent indicated deepening concern over economic conditions on the Continent amid the sovereign debt woes. The ECB also announced a new round of covered bond purchases, while the Bank of England said it will buy another GBP15 billion of government bonds.
"These are factors that could support risk sentiment in the short term," said Robert Rennie, chief currency strategist at Westpac Institutional Bank.
The ICE Dollar Index, which measures the greenback against a basket of currencies, was down slightly at 1.3430 at 0450 GMT compared with 1.3438 late Thursday in New York.
"With the much anticipated ECB decision behind us, the market focus is likely to shift back to the other side of Atlantic," said Yuki Sakasai, foreign exchange strategist at Barclays Capital.
In a sign of investors' hesitancy to place major bets before the U.S. jobs data, the dollar was little changed against the yen at Y76.63 from Y76.72 late Thursday in New York. The euro was also essentially flat at $1.3430 compared with $1.3438.
While dealers and analysts said the dollar would likely trend down against most counterparts if the jobs data help dispel some pessimism over the U.S. economy, the greenback could rise against the yen in this case, as the Japanese currency is considered an ever safer harbor.
"It appears the market has switched from a 'risk-off' to a 'risk-on' mode," said Citibank Japan chief currency strategist Osamu Takashima. Any further rises in U.S. long-term Treasury yields should offer continued support to the dollar against the yen, though Japanese exporters will continue to curb any rises, he said.
Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT
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