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The dollar edged higher against most of its rivals on Thursday as disappointing Chinese trade data left investors cautiously seeking havens after several sessions of increases for risk assets.
The euro eased 0.2 per cent to $1.3757 against the dollar after three sessions of gains that had added 3.1 per cent.
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The yen found even stronger haven support and climbed 0.5 per cent against the dollar to Y76.80.
Chinese exports rose by a weaker-than-expected 17.1 per cent in September, after climbing 24.5 per cent in August. Imports were unexpectedly lower, indicating that domestic demand was likely easing, analysts said.
On Wednesday afternoon in New York, appetite for risk had been further supported by minutes from the Fed’s last open market committee meeting. They showed that the US central bank stood ready to enter into further quantitative easing, QE3, if economic conditions continued to weaken and upside pressures on inflation remained absent.
“The recent improvement in sentiment remains primarily driven by hope rather than any material actions taken to date, leaving the sustainability of the rebound in riskier currencies in doubt given it is built on unstable foundations,” said Lee Hardman at Bank of Tokyo Mitsubishi UFJ.
“We remain sceptical that it represents anything other than a bear market rally driven by a sharp short squeeze in speculative positioning.”
The Australian dollar has lacked economic evidence to support its recent rally but on Thursday employment data showed that 20,400 jobs were created in September, more than doubling expectations of 10,000.
“This is a very significant data release that reduces prospects of a November rate cut,” said Adrian Foster at Rabobank.
The Aussie climbed 0.2 per cent to $1.0146 against the US dollar, taking its weekly gains to 3.9 per cent.
Sterling fell 0.3 per cent to $1.5693 against the dollar, in spite of trade data showing that the UK’s deficit with its trading partners shrank in August.
In Wednesday’s powerful, risk-driven session investors chose to overlook the rise in the unemployment rate to a 17-year high of 8.1 per cent.
The pound climbed against the euro, however, up 0.1 per cent to £0.8741. It was down 1 per cent to Y120.40 on the yen.
