🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

FOREX-Dollar near 9-month low vs sterling, Aussie jumps

Published 08/05/2009, 11:10 PM
Updated 08/05/2009, 11:12 PM

* Aussie jumps on unexpected employment gains

* NZ dlr dips after Q2 jobless rate climbs more than expected

* Sterling holds firm near 9-mth peak before BoE

* Economists split on if BoE will boost asset buying scheme

By Satomi Noguchi

TOKYO, Aug 6 (Reuters) - The dollar was steady near a nine-month low against the pound on Thursday ahead of policy decisions by the Bank of England and European Central Bank, while the Australian dollar jumped after data showing unexpected gains in employment.

Thursday's data surprised the market by showing Australia added 32,200 jobs in July, far better than forecasts for a 20,000 fall in employment, while the jobless rate held steady at 5.8 percent, adding to signs of an economic recovery.

The strength in the Aussie was tempered by a drop in full-time jobs and falling Chinese shares, but the market took these numbers as increasing the likelihood of an early rise in interest rates.

In contrast, the New Zealand dollar fell after data showed the country's jobless rate climbed more than expected to 6.0 percent for the second quarter, a nine-year high, backing views its central bank will keep interest rates at a record low well into 2010.

"The market cannot find a factor which could break the uptrend in the Aussie," said Hideki Amikura, deputy general manager of the forex section at Nomura Trust Bank.

"But that said, tomorrow's U.S. jobs report is expected to show weak numbers which may be the potential catalyst to dampen economic recovery hopes, and reverse recent gains in assets including stocks and yen crosses," Amikura added.

The Australian dollar jumped as high as $0.8462 on the Reuters dealing system, a touch closer to an over 10-month high of $0.8471 hit earlier this week, before trading at $0.8414, nearly flat from late New York trade. Traders said the Aussie's gains were cut as China stocks slid 3 percent on liquidity worries.

The New Zealand dollar extended earlier falls to $0.6700, down 0.5 percent on the day and further away from its 10-month peak of $0.6764 struck the day before.

BOE AND ECB EYED

The dollar fell versus the euro on Wednesday to its lowest point since December after data showing U.S. private employers cut more jobs last month but at the slowest pace since October, offering a glimmer of hope the labour market is stabilising.

Sterling held firm near a more than nine-month high against the dollar above $1.70 struck the previous day ahead of the BoE's expected decision and announcement on interest rates and its quantitative easing programme later on Thursday.

Economists are split on whether the BoE will inject more money into the economy by extending its asset purchases at the end of two-day policy meeting at 1100 GMT, although recently brighter British data is seen reducing such chances.

The euro was little changed at $1.4395, staying in sight of $1.4448 hit on trading platform EBS the previous day, its highest since December.

The ECB appears certain to keep its interest rate at a record low of 1 percent as it waits to see the impact of efforts so far to revive the economy and credit flows. The ECB policy decision is expected at 1145 GMT followed by a news conference by ECB President Jean-Claude Trichet.

The pound earlier rose close to the $1.7044 hit on EBS the day before, its highest since late October, before edging down 0.1 percent to $1.6980.

The dollar was steady against the yen at 94.88 yen, and the euro was little changed at 136.69 yen. (Editing by Joseph Radford)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.