Friday December 7, 2007 - 11:55:11 GMT
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Reuters - www.reuters.com
FOREX NEWS-Dollar steadies, payrolls in focus
Fri Dec 7, 2007 6:48am EST
(Changes dateline, byline, updates prices, adds quotes)
By Simon Falush
LONDON, Dec 7 (Reuters) - The dollar was steady versus a
basket of currencies on Friday as market players squared
positions before the U.S. jobs report later in the day, looking
for clues on the size of an expected Federal Reserve rate cut
The euro got a boost the previous day, recovering from
three-week lows versus the dollar after the European Central
Bank reiterated concerns about the inflation outlook and stirred
expectations for higher rates next year.
ECB President Jean-Claude Trichet warned of strong upward
pressure on inflation and said some central bankers had wanted a
rate rise from the current 4.0 percent.
But investors were reluctant to push the euro higher ahead
of the U.S. employment report at 1330 GMT, which may shed light
on whether the Fed will cut rates by a quarter-point or a more
aggressive half-point next Tuesday to help the economy.
Rises in equity markets kept investors in a reasonably
optimistic mood, also helping the dollar gain some ground,
although any such gains could be swiftly knocked on the head by
a weak payrolls reading.
"It seems risk appetite is increasing and that's
corresponding to a rise in stock markets," said Johan Javeus, FX
strategist at SEB Merchant Banking.
"However I don't think negative sentiment on the housing
market is going to turn around and if the (payroll data) is on
the weak side it will be negative for stocks and the dollar."
By 1135 GMT, the dollar was up steady against a basket of
six major currencies .DXY at 76.362, in sight of Thursday's
one-month high of 76.816.
It was up 0.25 percent at 111.55 yen <JPY=>, and was also up
against the Canadian dollar <CAD=> which has been hurt by a
surprise Bank of Canada rate cut earlier in the week.
The euro was steady at $1.4636 <EUR=>, but holding above the
previous day's three-week low of $1.4526 set before the hawkish
JOBS IN FOCUS
Following an upbeat reading of private-sector hiring this
week, the median forecast in a Reuters poll showed economists
expecting 90,000 new jobs to be added in the United States in
November after the 166,000 increase in October. This was up from
a forecast of 75,000 at the end of last week.
However other analysts pointed to weak readings from the job
components of the Institute for Supply Management's
manufacturing and service sector survey.
The manufacturing employment index fell to 47.8 in November,
slipping into contraction territory below the 50 mark to its
lowest level in more than four years.
Forecasts for non-farm payrolls ranged widely from a loss of
5,000 jobs to a gain of 150,000.
"Our 100,000 forecast is about in line with the low end of
this year's range and ... consistent with a 25 basis points rate
cut by the FOMC next week," said Tullett Prebon in a note to
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