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FOREX-Dollar steadies after fall on growing risk appetite

Published 01/04/2010, 07:46 PM
Updated 01/04/2010, 07:51 PM

TOKYO, Jan 5 (Reuters) - The dollar steadied on Tuesday, keeping broad losses made the previous day, as growing hopes for a global economic recovery encouraged investors to shift funds to riskier assets from the greenback.

The dollar was also under pressure from fund mangers trying to rebuild their portfolios at the start of the year by buying stocks, commodities and higher-yielding currencies.

The dollar had rallied in the past month partly due to position-squaring ahead of the year-end.

"Investors are seeking more risks thanks to better economic conditions," said Tsutomu Soma, senior manager of the foreign securities department at Okasan Securities.

"But whether risk-taking moves will carry on depends on U.S. jobs data due on Jan. 8," Soma said. "Investors feel they need to have the employment data to confirm the U.S. economy is improving solidly."

The median forecast of analysts polled by Reuters on the U.S. Labor Department's monthly payrolls report for December is for a decline of 8,000. However, the predictions ranged widely, from a loss of 80,000 jobs to an increase of 59,000.

The dollar index, a gauge of the U.S. currency's performance against six other major currencies, was down 0.1 percent to 77.442.

The euro edged up 0.1 percent from late U.S. trade to $1.4430 after advancing 0.6 percent the previous day.

The dollar dipped 0.1 percent against the yen to 92.46 yen, having slid from a four-month peak of 93.22 yen hit on trading platform EBS on Monday.

Traders were eyeing whether the dollar could rise back above 92.80 yen -- right around a 61.8 percent Fibonacci retracement of the dollar's fall from its high in August of 97.79 yen down to a 14-year trough of 84.82 yen hit in November. A rise above 92.80 yen could prompt a rally to 95 yen to the dollar, traders said. (Reporting by Rika Otsuka; Editing by Joseph Radford)

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