Euro steady against dollar before US jobs data

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GMT - 3 Hours Euro steady against dollar before US jobs data

Post by εﺓз• » ιη∂αġι яσ¢χ « • on Wed Sep 14, 2011 1:13 pm

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TOKYO: The euro was steady against the dollar in Asia on Friday, as market players cautiously awaited the release of US employment data later in the global trading day.

The euro fetched $1.4358 in Tokyo morning trade against $1.4356 in New York late Thursday. The European common currency held firm at 116.71 yen against 116.57 yen. The dollar inched up to 81.26 yen from 81.20 yen.

The European Central Bank on Thursday decided to raise its key interest rate by 0.25 percentage points to 1.50 percent with the aim of taming inflation, in line with market expectations.

The euro climbed against the dollar, supported by the ECB's move to suspend its collateral criteria for debt issued or guaranteed by Lisbon, meaning Portuguese banks will not be cut off from central bank funds and removing the threat of a liquidity crunch.

Portugal came under intense pressure this week after rating agency Moody's slashed its debt rating to junk status, pushing up the price Lisbon has to pay to raise fresh funds.

"The ECB's announcement to accept Portuguese debt as collateral gave some relief to the market," said Dai Sato, dealer at Mizuho Corporate Bank.

"But the market moved little in Asian trading hours before the release of the US jobs report," Sato said.

"After expectation for positive numbers boosted US stocks, traders are cautious that a disappointing result could reverse the market's direction."

US stocks surged Thursday on encouraging jobs data from the payrolls firm ADP, its monthly index showing that private non-farm businesses added 157,000 jobs in June, a solid jump after a weak 36,000 increase from April to May.

The median forecast for the upcoming employment report in a Dow Jones survey was for a 125,000 increase in non-farm payrolls after some economists revised their earlier forecasts upward.

A better-than-expected reading will likely lead to higher share prices and gains in US Treasury yields, which will in turn prompt dollar buying, Junichi Ishikawa, FX analyst at IG Markets Securities, told Dow Jones Newswires.

Currency rates hardly moved after Japan announced its current account surplus shrank by a smaller-than-expected 51.7 percent from a year earlier in May with the impact of the March earthquake and tsunami weighing on exports. (AFP)
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