TOKYO: The dollar eased in Asian trade Monday on profit-taking after the United States posted its biggest job growth in three years, boosting hopes for recovery in the world’s largest economy.
The dollar eased to 94.36 yen in Tokyo morning trade from 94.61 yen late Friday in Paris. US currency markets were closed for the Easter holiday. The euro rose to 1.3529 dollars from 1.3478 and to 127.65 yen from 127.52.
Dealers said short-term players were buying back the single European currency after it fell against the greenback following the employment report, which showed that the US economy added 162,000 jobs in March.
The job growth rate was just enough to offset continued lay-offs, population growth and people rejoining the labour market.
“US employment data last Friday showed better underlying momentum in private sector employment and highlighted the ongoing recovery of the US labour market,” Barclays Capital analyst Masafumi Yamamoto said.
At the same time the jobless rate remained steady at 9.7 percent. Since the recession began in December 2007, around eight million Americans have lost their jobs and some 15 million remain unemployed.
Investors said dollar-selling will likely be short-lived and “doesn’t suggest a shift in the medium-term outlook, which still favours dollar gains” against other currencies, a Tokyo trader told Dow Jones Newswires.
The greenback will also likely be supported by rising expectations that the Federal Reserve may hike interest rates before the European Central Bank, which will make the dollar more attractive as it will yield higher returns.
The ECB is set to hold its monetary policy meeting this week where interest rates are expected to remain unchanged at a record low of 1.0 percent, a level hit almost a year ago, as concern over the Greek crisis and high unemployment offset strong industrial output data and a surprise spike in inflation.
Elsewhere the Reserve Bank of Australia is expected to hold a meeting on Tuesday with a 75 percent chance for a 25 basis-point hike, traders said. Sydney lifted its lending rates to 4.0 percent last month on higher growth.
