| |
| |
 |
| |
|
| |
|
| |
|
NEW YORK - The dollar traded mostly higher Wednesday after a disappointing US job market survey prompted renewed caution ahead of a European Central Bank meeting and key US data.
The euro fell to 1.5044 dollars at 2200 GMT, down from 1.5082 late Tuesday in New York.
The dollar meanwhile was trading at 87.40 yen after 86.66 on Tuesday.
Payrolls firm ADP said the nonfarm sector lost 169,000 jobs last month, 26,000 fewer than in October.
The reading was worse than the 150,000 job losses expected by most analysts as businesses struggled amid stubbornly tight credit conditions and worries about the strength of the nascent recovery.
That raised concerns for the health of the US recovery and sent investors scurrying for the dollar, seen as a surer asset than the euro.
But many traders were waiting for Friday's US Labor Department report on unemployment and payrolls for a better indicator of the job market and economic momentum.
"The market seems to be sitting on its hands ahead of tomorrow's ECB rate decision and Friday's all-important US jobs data," said Dean Popplewell of the foreign exchange website Oanda.
The consensus view is that the labor report will show 125,000 job losses and unemployment holding at a rate of 10.2 percent.
But Popplewell said some analysts "have been busily revising their nonfarm payrolls headline print down below a net loss of 100,000 jobs... It's aggressive and optimistic in nature."
ECB governors are expected to maintain eurozone interest rates at a record low 1.0 percent, while taking the first steps toward withdrawing some of the exceptional support they made available to financial institutions at the height of the financial crisis.
"A significant policy announcement is expected at the final ECB meeting of the year tomorrow," said Lee Hardman of Bank of Tokyo-Mitsubishi.
"The ECB will clearly signal that its initial focus will be upon unwinding the supplementary liquidity gradually rather than setting the stage for rate hikes."
Camilla Sutton at Scotia Capital said the market is looking for signs of which central banks will raise rates first, after the Australian action earlier this year.
"Central banks will begin to tighten monetary policy in 2010 and relative policy and interest rates will prove a key driver of currencies," she said.
"We expect the ECB to lead the G10 (Group of 10) and begin to increase interest rates in the second quarter of 2010; while the Fed and Bank of Canada move in tandem beginning in the third quarter and finally the Bank of England remains dovish and leaves rates on hold until the fourth quarter. This provides a boost to euro and should drive some dollar weakness."
Amid the skittishness, the price of gold meanwhile struck a record high.
Gold hit 1,217.23 dollars on the London Bullion Market one day after breaking through the 1,200-dollar barrier for the first time.
In New York, gold traded as high as 1,218.40 dollars an ounce, also a record.
Gold has smashed record after record recently on the back of inflationary fears and moves by central banks to diversify assets away from the dollar, which until Wednesday had been declining against the European single currency.
"It is a store of value while investors have serious doubts about the global financial system," said CMC Markets analyst Michael Hewson.
"It is something that is not going to lose its value like a currency."
In late New York trade, the dollar stood at 1.0017 Swiss francs from 0.9992 Tuesday.
The pound was at 1.6632 dollars after 1.6617.
- AFP /ls
|
