The U.S. dollar held steady on Friday with investors consolidating positions ahead of October non-farm payrolls data due later in the session, a report that would highlight the durability of an economic recovery.
A Reuters poll showed median forecasts are for 175,000 jobs being shed, slower than the 263,000 lost in September, with the jobless rate rising to 9.9 percent. If the numbers disappoint, investors are likely to flock to the U.S dollar and the yen, while a strong report could see high-yielding currencies gain.
"No doubt a strong jobs number could give the high-yielders a lift," said Amber Rabinov, market economist at ANZ. "Having said that we don't think there is much room for them to rally as participants are very long on pro-cyclical currencies like the Aussie and the Kiwi. Hot money can move very quickly and as such profit taking will weigh on any upside surge."
An index that measures the dollar against six other major currencies was flat at 75.74 <=USD>, while the euro, the biggest component of that basket, was broadly unchanged at $1.4875. It had jumped to as high as $1.4917 in the previous session after ECB President Jean-Claude Trichet sounded optimistic about a 2010 recovery and hinted at a slow motion exit strategy.
It also held steady at above 135 yen, having gained nearly 0.1 percent on Thursday. The yen was unchanged at 90.75 per dollar.The pound drifted lower to $1.6573 with the Bank of England. Both the ECB and Bank of England left interest rates on hold Thursday, as did the Fed the day before. The Fed is expected to keep rates unchanged for months to come and only an improvement in the job market is likely to get it thinking about higher interest rates.
In contrast, markets will look for the Reserve Bank of Australia's (RBA) statement on monetary policy due out at 0030 GMT for clues on whether it will continue to raise rates in December. The Bank which raised rates earlier this week for a second straight months is likely to lift inflation and growth forecasts.
A Reuters poll showed median forecasts are for 175,000 jobs being shed, slower than the 263,000 lost in September, with the jobless rate rising to 9.9 percent. If the numbers disappoint, investors are likely to flock to the U.S dollar and the yen
"No doubt a strong jobs number could give the high-yielders a lift," said Amber Rabinov, market economist at ANZ. "Having said that we don't think there is much room for them to rally as participants are very long on pro-cyclical currencies like the Aussie and the Kiwi. Hot money can move very quickly and as such profit taking will weigh on any upside surge."
An index that measures the dollar against six other major currencies was flat at 75.74 <=USD>, while the euro, the biggest component of that basket, was broadly unchanged at $1.4875
It also held steady at above 135 yen
In contrast, markets will look for the Reserve Bank of Australia's (RBA) statement on monetary policy due out at 0030 GMT for clues on whether it will continue to raise rates in December. The Bank which raised rates earlier this week for a second straight months is likely to lift inflation and growth forecasts.
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