Aussie jumps after strong jobs data
By William L. Watts, MarketWatch
LONDON (MarketWatch) -- The U.S. dollar held its ground versus major rivals Thursday as investors awaited the release of weekly jobless claims data, while the Australian dollar saw gains after strong employment data.
The dollar index (DXY 82.54, -0.05, -0.06%) , a measure of the U.S. unit against a basket of major rivals, traded at 82.600, up from 82.545 in North American trade late Wednesday. The index had traded around 82.897 Wednesday, but lost ground after the Federal Reserve's Beige Book reported highlighted signs of a slowing economy and limited inflation pressure.
Data on U.S. weekly jobless claims and international trade for July will be released at 8:30 a.m. Eastern time.
The euro (EURUSD 1.2726, +0.0004, +0.0314%) slipped to $1.2711 versus the dollar, down from $1.2731 late Wednesday in range-bound trade.
"The driver of the currency market is euro/dollar. But it seems asleep at the wheel right now," said Steve Barrow, currency and fixed-income strategist at Standard Bank. "Traders' paranoia over further [quantitative easing] from the Fed, which could decimate the dollar, is only matched by the fear of default from a euro-zone member, which could decimate the euro."
With the euro/dollar pair stuck, overall currency trade is moribund, he said.
The dollar changed hands versus the Japanese currency (USDYEN 83.6400, -0.1800, -0.2147%) at 83.70 yen, down from ¥83.94. The euro (EURYEN 106.4700, -0.2400, -0.2250%) bought ¥106.43, down 0.3%.
The dollar hit its lowest level versus the yen since May 1995 on Wednesday. Finance Minister Yoshihiko Noda on Thursday renewed a warning that he would take "decisive steps" to halt the yen's rise, news reports said.
The Australian dollar (AUDUSD 0.9252, +0.0065, +0.7075%) rose 0.7% versus the U.S. unit to trade at 92.48 U.S. cents.
Australian jobs rose 30,900 for the sixth consecutive monthly rise, while the unemployment rate fell to an 18-month low of 5.1%. Read about the Australian jobs data.
"Today's strong employment data highlights the strength of the Australian economy which stands in sharp contrast to the rest of the G-20 universe where growth is sluggish at best," said Boris Schlossberg, director of currency research at GFT. "The continued expansion of the Australian labor market is likely to put upward pressure on wages which in turn could force [the Reserve Bank of Australia] to tighten monetary policy further if Q3 CPI prints above trend."
The British pound traded at $1.5392 versus the dollar, down from $1.5480 on Wednesday.
The currency eventually extended an earlier loss after showing little immediate reaction to the widely-expected decision by the Bank of England's Monetary Policy Committee on Thursday to leave its key lending rate unchanged and to leave its quantitative-easing program of bond purchases on hold. Read about the BOE decision.
The pound saw pressure earlier in the session after the Office for National Statistics reported that Britain's seasonally-adjusted deficit on trade in goods widened to a record 8.7 billion pounds ($13.4 billion) in July from an upwardly revised 7.5 billion pounds in June.
