FOREX-Euro grinds towards March low; Aussie firm on jobs

* Euro stuck at 2-week low vs dollar, March low beckons

* Yen up against dollar and euro, U.S. yield drop supports

* Aussie firm on upbeat jobs but blocked near $0.9300

* Yuan news watched as Geithner to hold talks in China

By Charlotte Cooper

TOKYO, April 8 (BestGrowthStock) – The euro ground closer to this
year’s low against the dollar on Thursday, waiting for the ECB to
flesh out lending rules likely to support Greece, while jobs data
in Australia wasn’t quite upbeat enough to power up the Aussie.

The yen held firm on the dollar after a drop in U.S. Treasury
yields, while dealers were also keeping a close eye on news out
of China, where U.S. Treasury Secretary Timothy Geithner was
headed for talks, for any signals on when Beijing might let the
yuan rise. [ID:nTOE636033]

The Australian dollar firmed after data showed 19,600 jobs
were added in March and full-time employment strengthened, all
largely in line with forecasts but not enough to muster buying
support in anticipation of another rate hike in May.
[ID:nSGE63605Y]

It lacked momentum to test key resistance at $0.9300, with
talk of options-related selling near that level ahead of expiries
expected later in the day.

“It looks like momentum is still building in the labour
market in Australia,” said Gareth Berry, currency strategist at
UBS in Singapore.

“While we’re not expecting another hike in May, these numbers
do potentially raise the risk that the Reserve Bank might be
tempted to do another hike in May — but it’s too early to say.”

The Aussie was steady at $0.9276 (AUD=D4: ) and was flat at
86.42 yen (AUDJPY=R: ), unable to push up to the previous session’s
18-month high at 87.51 yen.

Implied probability shows investors are pricing in a
one-in-three chance of a quarter point increase in May.

EURO STRUGGLING

The euro fell (Read more about the trembling euro. ) to its weakest level in two weeks, grinding
nearer and nearer to its March trough of $1.3267 (EUR=: ), which at
the time was the lowest it had been since May.

It dipped to $1.3314 on trading platform EBS before edging
back to stand 0.1 percent down on the day at $1.3326 and fell 0.2
percent to 124.24 yen (EURJPY=R: ).

Traders say loss-cutting sell orders are likely below $1.3267
and they then expect small support levels at round numbers such
as $1.3200 and $1.3100, but with the euro firmly in a downtrend,
$1.30 is seen as the next psychological point.

“There is evidence of contagion from Greece in global markets
today. It’s not too severe but it’s there. We’re seeing the yen a
bit stronger and the euro a bit weaker,” said Greg Gibbs, a forex
strategist at the Royal Bank of Scotland in Sydney.

The spread of the yield on 10-year Greek bonds over German
Bunds widened to 413 basis points on Wednesday, the biggest gap
in the lifetime of the euro, as investors grew increasingly
sceptical of the country’s ability to end its debt crisis.
[ID:nLDE636138]

The European Central Bank meets later and the market is
waiting for it to flesh out new collateral rules that will extend
easier lending terms into 2011. [ID:nLDE6350JT]

An ECB official has said the rules are not specifically
designed to help Greece, but the changes did remove the threat
hanging over the country that its sovereign debt might drop out
of the pool of collateral. [ID:nLDE62O1AH]

The dollar edged down 0.1 percent to 93.22 yen (JPY=: ) after
slipping as far as 93.15 yen on Wednesday, its weakest in a week.

Analysts said the yen gained both on a retreat in risk
appetite due to Greece and a drop in U.S. Treasury yields
following strong demand at a 10-year auction.

Loss-cutting dollar sell orders are expected around 93.00 yen
but Japanese importers are also likely to buy the dollar on dips
and prevent it from falling too steeply, a trader at a Japanese
bank said.

He expected dollar resistance at about 93.40, the nine-day
moving average or tenkan-sen on the Ichimoku daily chart.

The dollar index (Read more about the global trade. ) (.DXY: ), a measure of its strength against
six other major currencies, rose 0.3 percent to 81.674, below
March’s 10-month high of 82.240.

Stock Market Report
(Additional reporting by Kaori Kaneko and Aiko Hayashi; Editing
by Chris Gallagher)

FOREX-Euro grinds towards March low; Aussie firm on jobs