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Dollar mixed vs. rivals ahead of nonfarm payrolls data

Published 02/07/2014, 05:21 AM
Dollar mixed vs. counterparts ahead of U.S. data
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Investing.com - The dollar was mixed against the other major currencies on Friday, as investors remained cautious ahead of the release of a highly anticipated U.S. employment report to be released later in the day.

The dollar was higher against the euro, with EUR/USD down 0.18% to 1.3565.

The dollar regained some ground after falling to one-week lows against the single currency on Thursday, when European Central Bank President Mario Draghi said the euro zone will not slide into deflation.

Draghi said the ECB sees a protracted period of low inflation, not full blown deflation, reiterating that the bank is “monitoring developments closely".

Also in the euro zone, data on Friday showed that Germany's trade surplus narrowed to EUR18.5 billion in December, from EUR18.9 billion the previous month. Analysts had expected the trade surplus to narrow to EUR17.3 billion in December.

But the greenback remained under pressure ahead of U.S. employment data to be released later in the trading session, which was expected to give more indications on the strength of the labor market's recovery.

The pound edged higher against the dollar, with GBP/USD adding 0.08% to 1.6335.

Official data earlier showed that U.K. manufacturing production rose 0.3% in December, less than the expected 0.6% increase. Manufacturing production in November was revised down to a 0.1% fall from a previously estimated flat reading.

A separate report showed that the U.K. trade deficit narrowed to GBP7.7 billion in December, compared to expectations for a deficit of GBP9.3 billion. The trade deficit in November was revised to GBP9.8 billion from a previously estimated deficit of GBP9.4 billion.

The dollar was little changed against the yen, with USD/JPY easing up 0.02% to 102.12 and higher against the Swiss franc, with USD/CHF adding 0.09% to 0.9018.

In Switzerland, official data showed that retail sales rose at an annualized rate of 2.3% in December, below expectations for a 3.9% increase, after a 4.2% year-on-year gain in November.

In addition, the Swiss National Bank said foreign currency reserves rose to CHF437.7 billion last month, from CHF435.2 billion in December.

The greenback was steady to higher against the Australian, New Zealand and Canadian dollars, with AUD/USD falling 0.18% to 0.8943, NZD/USD edging 0.09% lower to 0.8241 and USD/CAD easing 0.04% to 1.1068.

Earlier in the day, the Reserve Bank of Australia said in its quarterly monetary policy statement that "over the past few months, there have been further signs that very stimulatory monetary policy is working to support economic activity."

The central bank projected core inflation of 2.25% to 3.25% through December 2014, a 0.25% increase compared to what was initially estimated three months earlier.

The RBA predidcted that gross domestic product will rise by 2.25% to 3.25% through December, "primarily owing to the lower exchange rate, which is expected to boost exports and restrain imports."

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.10% to 81.06.

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