FOREX-Dollar near 1-mth high vs euro before US jobs data

The dollar edged up towards a one-month high against
the euro on Friday before monthly U.S. jobs data later in the day, with
investors viewing the report as a key hurdle for whether the U.S. currency can
sustain its rebound.
A mixed bag of U.S. data released the previous day showing the economy
expanding less than expected in the second quarter, a spike in jobless claims
but a pick-up in Midwest business activity did not prove decisive for the
dollar. [ID:nN31399964]
Investors are still looking for the Federal Reserve to raise interest rates
later in the year, just as mounting signs of economic slowdown from the euro
zone to Australia have started to take a toll on other major currencies.
"The dollar proved surprisingly resilient despite Thursday's downbeat data,"
said Motonari Ogawa, director of forex trading at Barclays Bank.
"No doubt the jobs data will generate a host of opinions, but the market is
likely waiting for a surprise -- whether it be on the upside or downside -- as
the next catalyst," said Ogawa.
In a Reuters poll, economists forecast that companies shed 75,000 workers in
July in what would be the seventh straight month of job losses.
The dollar was little changed from late U.S. trade near 107.77 yen

after hitting a one-month peak of 108.34 yen earlier this week.
Japan Prime Minister Yasuo Fukuda was overhauling his cabinet on Friday in a
bid to shore up his flagging popularity, domestic media reported. But analysts
said the reshuffle of top officials should not have much impact on the yen.
[ID:nT196476]
The euro fell 0.3 percent to $1.5559 ,>
$1.5522 hit earlier this week and well off a record peak of $1.6040 struck last
month. Against the yen, the euro fell 0.3 percent to 167.67 yen .>
Traders said the euro's weakness against the yen, with selling emerging in Asia
following the recent string of weak European data, was weighing on the single
European currency.
"The euro appears to be peaking out. The ECB hiked rates in July and inflation
still remains a threat, but indicators this week did not show euro zone economic
conditions in a positive light," said Takahide Nagasaki, chief forex strategist
at Daiwa Securities SMBC.
Data this week showed euro zone economic sentiment hit its lowest in over five
years in July, pointing to a stagnant economy and boosting expectations that
interest rates will be kept on hold this year with inflation still at a record
high. [ID:nL9244016]
Beyond the jobs data, market players were also keeping a close eye on oil
prices. The greenback recovered from its lows on Thursday as crude oil prices
in nearly four years in July.

RATE CUT SPECULATION HITS AUSSIE
Speculation over near-term interest rate cuts plagued the Australian dollar on
Friday.
Columnist Terry McCrann said the Reserve Bank of Australia would use its
post-meeting statement on Tuesday to set out the case for lower interest rates,
following two hikes earlier in the year that lifted the cash rate to a 12-year
peak of 7.25 percent. [ID:nSYD209018]
The Aussie dropped 0.6 percent to $0.9364 >
seven-week low of $0.9360. Traders said some hedge funds were bailing out of
long positions in the Aussie and kiwi.
The New Zealand dollar fell 0.7 percent to $0.7280, touching a 10-month low of
$0.7272.
The kiwi has taken a hit since the Reserve Bank of New Zealand cut rates by a
quarter point to 8.00 percent last week and RBNZ Governor Alan Bollard signalled
this week that the central bank had "plenty of room" for cutting rates further.
(Editing by Michael Watson)