Yen crosses weaken, then rebound after Japan earthquake
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — The U.S. dollar posted marginal gains versus most major rivals Friday, with traders awaiting potentially volatility-inducing nonfarm-payrolls data amid a slightly risk-averse market tone.
The ICE dollar index DXY +0.35% , which tracks the U.S. unit against a basket of six major rivals, rose to 80.531 versus a level of 80.250 in North American trade late Thursday. See: How to read the Sandy-impacted jobs report .
Economists surveyed by MarketWatch produced a consensus forecast for a rise of just 80,000 in November nonfarm payrolls, while the unemployment rate is forecast to remain unchanged at 7.9%. The data are scheduled for release at 8:30 a.m. Eastern.
Analysts noted that forecasts show a wider-than-usual range due to uncertainty over the impact of Hurricane Sandy and questioned whether the report will live up to its market-moving reputation.
After all, “downside surprises may be explained away using a Sandy effect, upside surprises could be a smaller-than-expected Sandy impact, and payrolls will struggle to beat the 150,000 recent average monthly payrolls gain, which would constitute a genuinely positive surprise,” said Elsa Lignos, currency strategist at RBC Capital Markets.
The euro EURUSD -0.47% changed hands at $1.2928, down from $1.2968. The shared currency slipped Thursday after European Central Bank President Mario Draghi painted a downbeat picture of the euro-zone economy and indicated a rate cut had been discussed by the ECB’s Governing Council. Still, some strategists argue that the lack of a move by the ECB despite a sharp downgrade in the bank’s staff forecasts belie a lack of desire to use rate cuts for further monetary stimulus.
The euro saw added selling pressure Friday after the German Bundesbank slashed its 2013 forecast for the German economy. Read The Tell: Some bad news about that German growth engine .
“The headline prompted the euro to dip 30 points [versus the dollar] with more stops looking vulnerable under $1.2920 and $1.2880,” Lignos said.
The dollar traded at 82.36 Japanese yen USDJPY -0.12% , down slightly from ¥82.39 on Thursday. The dollar dipped toward ¥82.14 in earlier action as the yen strengthened in the wake of a 7.3 magnitude earthquake of the country’s northeast coast. See: Quake measuring 7.3 hits off northern Japan .
A subsequent tsunami warning was lifted. Yen crosses rebounded after it was clear the temblor was smaller and much less destructive than the massive quake that struck the country in March 2011, analysts said.
The British pound GBPUSD -0.22% changed hands at $1.6026, down from $1.6055.
The Australian dollar AUDUSD -0.09% fetched $1.0467, down from $1.0478 late Thursday.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt. Follow him on Twitter @wlwatts.
