FOREX-Dlr near lows, jobs data unlikely to offer succour

* Dollar index near 11-month lows ahead of U.S. jobs data

* Euro supported near 9-1/2 month highs hit post-Fed

* Dollar/yen slips after BOJ keeps asset fund size steady

(Changes dateline, releads, adds quote, previous TOKYO)

By Anirban Nag

LONDON, Nov 5 (BestGrowthStock) – The dollar was mired near 11-month
lows against a basket of currencies on Friday, while the
Australian dollar hit 28-year highs as the Federal Reserve’s
stimulus package spurred investors appetite for risk.

Investor focus now turns to U.S. monthly jobs data and
traders said any upside surprise from the numbers is likely to
offer only a fleeting respite to the dollar. A weaker number
could see the dollar-selling trend gather pace.

“The Fed has made it clear that quantitative easing will
remain in place and there is enough slackness in the U.S.
economy. So any strong number is unlikely to offer much support
to the dollar,” said Ian Stannard, senior currency strategist at
BNP Paribas.

Economists polled by Reuters expect 60,000 jobs were created
in October after 95,000 were lost in September. That is seen as
too feeble a signal to imply any meaningful shift in the
stagnant labour market. As a result the unemployment rate is
expected to remain sticky at 9.6 percent. [ID:nN02101041].

The dollar index (Read more about the global trade. ) (=USD: )(.DXY: ) was flat at 75.90, having hit
an 11-month low of 75.63 on Thursday and opening the way for a
possible test of its 2009 low of 74.17.

The euro was up 0.2 percent at $1.4222 (EUR=: ), not far from
$1.4283, its strongest since late January, struck on Thursday.
Traders reported options barriers at $1.43.

The Australian dollar was up 0.3 percent at $1.0173
(AUD=D4: ), having risen to a 28-year high of $1.0183 earlier in
the session. Apart from buoyant risk appetite, the Aussie was
supported by upbeat comments from the central bank on Friday.

Australia’s central bank raised rates by 25 basis points
this week to 4.75 percent, amongst the highest in the developed

That was in sharp contrast to the Fed’s commitment this week
to buy more Treasuries, implying ultra-loose monetary policy.
That has renewed the focus on the dollar as a funding currency
for purchases in commodities, emerging markets and
higher-yielding currencies.

Highlighting the risk-on sentiment, share markets around
Asia and Europe extended gains on Friday.


Link to PDF on Fed decision:

For more stories on Fed policy: [FED/AHEAD]

Graphic on assets and QE



The dollar was flat against the yen, at 80.70 yen, paring
small early gains, and edging closer to its 1995 post-war record
low of 79.75 yen (JPY=: ). Traders said Japanese exporters lined
up with offers at 80.80-81 yen levels.

The Bank of Japan (BOJ) concluded a policy review without
easing policy further. The yen firmed slightly after the
announcement on disappointment that the bank had not announced
any expansion to its asset buying plan in response to the Fed.

BOJ Governor Masaaki Shirakawa said on Friday he saw upside
and downside risks to Japan’s economy as evenly balanced.

Analysts expect some weakening in Japan’s economic
indicators ahead and say more easing through asset-buying will
be needed.

“Yen strength feels as if it is coming home to roost,” said
Robert Rennie, chief strategist at Westpac in Sydney. “Now is
the time for the BOJ to start to stand up and deliver.”

On the crosses, the yen lost ground this week against the
euro and the Aussie dollar, falling to its lowest since May at
82.15 yen per Australian dollar (AUDJPY=R: ) on Thursday.

A fall in yen option volatilities has helped boost the
crosses, as it encourages carry trades by suggesting less risk
of currency market swings, a trader at a European bank said.

One-month dollar/yen (JPY1MO=: ) option volatility has fallen
after the Fed decision but it still remains above the levels
seen earlier in the decade, the trader noted.

The latest rise in cross yen pairs was more likely a
knee-jerk reaction to falling volatilities than a real increase
in carry trade flows, he added.

(additional reporting by Charlotte Cooper in Tokyo)

(Editing by Sujata Rao)

FOREX-Dlr near lows, jobs data unlikely to offer succour