Friday April 3, 2009 - 10:24:15 GMT
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Reuters - www.reuters.com
FOREX NEWS-Euro falls vs dollar as U.S. jobs data looms
* Euro falls vs dollar on jitters ahead of U.S. jobs data
* U.S. economy seen losing 650,000 jobs in March
* White House spokesman says warns of 'severe' job cuts
* Yen turns lower vs euro, stg gains after EZ, UK PMIs
(Updates prices, adds quotes)
By Jessica Mortimer
LONDON, April 3 (Reuters) - The euro fell against the dollar
on Friday in cautious trade as investors nervously awaited key
U.S. employment data which are expected to show the U.S. economy
suffered deep job losses in March.
The non-farm payrolls figure, due at 1230 GMT, is forecast
to show a fall of around 650,000 jobs in March to take the
unemployment rate to a 26 year high of 8.5 percent.
Speaking on Friday, White House spokesman Robert Gibbs
warned the jobs report is likely to show "additional severe job
Nevertheless, the euro pared earlier losses against the
dollar and gained against the yen, while sterling also rose
after better-than-expected euro zone and UK services sector
data, which helped European equities .FTEU3 to trim losses.
"Risk is back on the agenda and the bias is still very
strongly towards a softer dollar, but people are wary ahead of
the non-farm payrolls numbers," Calyon currency strategist
Stuart Bennett said.
A surge in investors' risk appetite after Group of 20
leaders agreed a $1.1 trillion deal to counter the global crisis
[ID:nL270941] had sparked sharp gains in equities on Thursday,
while the euro and other currencies seen as higher risk jumped.
At 0958 GMT, the euro fell 0.1 percent against the dollar to
$1.3444 <EUR=>, while it rose 0.2 percent against the yen to
134.30 yen <EURJPY=R> after trading in negative territory in
early European trade.
The dollar also gained 0.3 percent against the yen to 99.89
yen <JPY=> after rising as high as 100.18 yen in early trade on
EBS trading platform.
The dollar's trade-weighted index was up 0.1 percent on the
day at 84.429 .DXY.
Friday's services sector purchasing managers' survey for the
euro zone showed an unexpected upward revision to 40.9 from the
40.1 flash estimate, revealing that the sector contraction is
starting to ease. [ID:nLAG003369].
Investors were particularly encouraged by the equivalent
survey for the UK services sector, which showed the index
jumping to a six-month high of 45.5 from 43.2, well above
forecasts for just 43.5. [ID:nLAG003370].
Sterling gained 0.2 percent against the dollar to $1.4761
<GBP=>, having earlier hit a seven-week high of $1.4828 after
the UK data was released.
Calyon's Bennett noted that although investors are cautious
ahead of the U.S. jobs data, it may need a particularly weak
number for the dollar to push much higher.
"It would take a big downside surprise in non-farm payrolls
for that bubbled optimism after the G20 to be pricked," he said.
Investors meanwhile continued to digest the European Central
Bank's decision on Thursday to cut interest rates by 25 basis
points to 1.25 percent, less than the 50 basis point cut that
had been widely expected.
The ECB left the door open for more rate cuts and President
Jean-Claude Trichet said it would reveal at the next meeting any
unconventional monetary easing measures it might take.
"After people scrutinised Trichet's comments, expectations
are growing that the ECB will lower rates again and that they
will announce unconventional measures, which is a long-term
negative for the euro," Nordea currency strategist Nils
Later in the afternoon, investors will be watching for U.S.
non-manufacturing ISM data at 1400 GMT.
(Reporting by Jessica Mortimer)
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