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Forex - Yen flat, Aussie weaker in Asia as U.S. jobs data in focus

Published 12/04/2014, 05:28 PM
Updated 12/04/2014, 05:29 PM
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Investing.com - The yen held flat and the Aussie dipped slightly on Friday in early Asia with the focus on key U.S. jobs data ahead.

JPY/USD traded at 119.82, up 0.03%, while AUD/USD changed hands at 0.8378, down 0.07%.

A relatively light data with Australia's November AI Grp/HIA Construction Index fell 8.0 points to 45.4, dropping from expansion territory in October. In Japan, at 1400 (0500 GMT) the October preliminary indices of leading coincident indicator is due and expected at 104.2.

Overnight, the dollar dropped against most major currencies on Thursday after the European Central Bank decided to hold off on implementing fresh stimulus measures, which sparked demand for the euro and other higher-yielding currencies.

The European Central Bank left interest rates on hold at their current record lows of 0.05% earlier Thursday, in a widely anticipated decision.

The single currency rose after Draghi said the ECB would reassess the success of its existing stimulus programs and the impact of weak oil prices on the euro area economy in the early part of next year.

He said the bank could potentially change the size, scale and composition of its existing stimulus programs. The governing council remains unanimous that it will take further measures if necessary, he added.

The ECB's current stimulus program includes purchases of asset-backed securities and covered bonds, though markets have been keeping a close eye out for plans to announce purchases of government debt, and the bank's decision to remain in a wait-and-see mode gave the euro support, which came at the dollar's expense.

The ECB substantially revised down its forecasts for growth and inflation and warned that the latest forecasts do not take into account the recent steep drop in oil prices.

The bank now expects the euro zone economy to grow by just 0.8% this year, 1.0% in 2015 and 1.5% in 2016. It cut its inflation forecast for this year to just 0.5% from 0.6% and to 0.7% in 2015 from 1.1%.

Meanwhile in the U.S., the Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Nov. 29 decreased by 17,000 to 297,000 from the previous week’s revised total of 314,000, in line with expectations, though the European Central Bank served as the dollar's chief steering current.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 0.04% at 88.69.

On Friday, the U.S. is to round up the week with the closely watched government report on nonfarm payrolls, the unemployment rate and average earnings, as well as a report on factory orders.

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