FOREX-Dollar supported as kiwi, Aussie fall on data

By Masayuki Kitano

TOKYO, Feb 4 (BestGrowthStock) – The dollar was broadly steady on
Thursday after blipping higher as the New Zealand dollar tumbled
on a jump in unemployment and the Australian dollar slipped on
data showing a dip in monthly retail sales.

The New Zealand dollar (NZD=D4: ) hit a five-month low of
$0.6960 after data showed the country’s jobless rate rising to a
10-year high, prompting markets to scale back expectations of an
interest rate rise before mid-year. [ID:nSGE6110KG]

The Australian dollar remained on a weak footing in the wake
of the Reserve Bank of Australia’s surprise decision this week to
hold off from raising interest rates.

The Aussie dollar touched a six-week low of $0.8772 (AUD=D4: )
after figures showing Australia’s retail sales fell more than
expected in December, although that came after an upwardly
revised jump in November. [ID:nSGE6120NF]

The fall in the higher-yielding currencies helped lend broad
support to the dollar, especially with the euro on shaky ground
due to fresh fears that Portugal and Spain could join Greece as
the next countries to face fiscal problems.

“Market players are now watching to see if the euro’s fall
will stop at $1.3850 or if it will keep heading toward $1.3700 or
maybe even $1.3500,” said a trader for a major Japanese bank.

The euro dipped as low as $1.3866 (EUR=: ), edging close to a
seven-month low of $1.3851 hit on trading platform EBS earlier
this week. Market players said there was talk of option triggers
near $1.3850, and more below that at levels such as $1.3800,
$1.3760 and $1.3750.

The euro later pared its losses and was steady compared to
late U.S. trading on Wednesday at $1.3890.

The market focus now turns to the European Central Bank (ECB)
rate decision later in the day. The ECB is widely expected to
keep rates unchanged at its meeting on Thursday as financial woes
in Greece, Portugal and Spain endanger the currency bloc’s
recovery. [ID:nLDE6110RC].

News on Wednesday that Portugal’s debt agency IGCP cut its
T-bill placement to 300 million euros ($435.5 million) from a
planned 500 million as yields spiked higher compared with
January’s placement put renewed focus on the euro zone’s fiscal
woes. [ID:nLDE6121G4]

In addition, Spain on Wednesday raised forecasts for its
fiscal deficit for the next three years. [ID:nLDE6122Q0]

DOLLAR INDEX

All that adds to the view that the United States will recover
at a faster pace than the eurozone, a belief that is likely to
see the dollar gain further ground.

The dollar index (Read more about the global trade. ) was steady at 79.393 (.DXY: ), after rising to
79.520 earlier. The dollar index (Read more about the global trade. ) faces resistance near its
six-month high of 79.534 hit earlier in the week and then around
80.07, which is a 38.2 percent retracement of the fall from 89.624
to 74.17 in 2009.

The dollar dipped 0.1 percent against the yen to 90.87
(JPY=: ), ceding some ground after hitting a two-week high of 91.28
yen on Wednesday helped by better economic data out of the United
States and higher U.S. yields.

U.S. data on Wednesday showed signs the job market was
stabilising while the Institute for Supply Management’s index of
non-manufacturing companies rose to 50.5 from 49.8 in December.
[nN03150829].

All that bodes well for the nonfarm payrolls numbers due on
Friday. A Reuters poll of top 20 forecasters estimated 8,000 jobs
were added to the economy. That compares with a forecast of 5,000
jobs being added in a larger survey of 80 economists.
[nN03175623]

The Bank of England’s monetary policy meeting will also be in
focus on Thursday. The BOE is expected to halt its quantitative
easing programme, although interest rates are seen likely to be
held at 0.5 percent. [ID:nLDE6122M4]

Sterling edged up 0.1 percent to $1.5912 (GBP=D4: ).

After trimming its earlier losses, the Australian dollar was
0.1 percent lower on the day at $0.8814. A fall to below $0.8735
would take the Aussie dollar to a four-month low.

The New Zealand dollar slid 0.5 percent to $0.6984 (NZD=D4: ).
($1=.6888 Euro)

Stock Market Analysis

(Additional reporting by Anirban Nag in Sydney, and Charlotte
Cooper and Satomi Noguchi in Tokyo; Editing by Michael Watson)

FOREX-Dollar supported as kiwi, Aussie fall on data