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FOREX-Dollar near 9-mth low vs pound, Aussie trims gains

Published 08/06/2009, 01:39 AM
Updated 08/06/2009, 01:42 AM

* Aussie jumps on surprise employment rise, later trims gain

* Fall in Chinese shares weighs on Australian dollar

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

* Sterling steady, hovers 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 held near a nine-month low against the pound on Thursday before a policy decision by the Bank of England, while the Australian dollar rose back towards a 10-month peak after a surprise rise in Australian employment.

The euro was steady against the dollar ahead of an interest rate decision by the European Central Bank later in the day.

The Australian dollar jumped after data showed that 32,200 jobs were created in Australia in July, far better than forecasts for a loss of 20,000 jobs, adding to the risk of an early rise in interest rates.

Some of the strength in the Aussie was tempered by a 1.9 percent drop in Chinese shares, but the Australian dollar still hovered near its highest level since late last September.

"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 said.

Sterling held steady against the dollar compared to late U.S. trading on Wednesday at $1.6994, down from its highest in more than nine months of $1.7044 hit on Wednesday.

The euro was little changed at $1.4409, not far from a 2009 high of $1.4448 hit on trading platform EBS on Wednesday, its highest since mid-December.

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

The ECB appears certain to keep its key interest rate at a record low 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 Australian dollar rose 0.3 percent to $0.8439, but had slipped off an intraday high of $0.8462. It hit a 10-month high of $0.8471 earlier this week.

Against the yen, the Australian dollar rose 0.6 percent to 80.22 yen but was off the day's high of 80.53 yen.

"Aussie/yen had jumped, but since Shanghai shares fell quite a bit from the open it pared some gains. The correlation between the Aussie and Shanghai shares has been very high recently," said a trader for a major Japanese bank.

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 New Zealand dollar dipped 0.3 percent to $0.6716, pulling away from a 10-month high of $0.6764 hit the day before.

The dollar edged up 0.2 percent against the yen to 95.11 yen. (Additional reporting by Masayuki Kitano; Editing by Michael Watson)

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