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The
day's main event will be U.S. non-farm payrolls data at 1230 GMT
(0830 EDT). Traders said a number near the forecast 223,000 jobs
was likely to encourage bets that rates will rise within months
and prod the dollar towards $1.0850 per euro.
The dollar dipped less than 0.1 percent to $1.0935 <EUR=>
against the euro in morning trade in Europe but was steady at
97.791 against a basket of currencies.
"It's pretty straightforward today - the Fed has said it wants
to see improvement in the labor market, which everyone has taken
as a couple of hundred thousand jobs each month," said a senior
dealer with one international bank in London. "If they get that,
the dollar stays bid. If not, it will sell off."
The dollar was still around half a percent higher against the
euro and the yen on the week, but that did not affect four
months of stagnation, which have undermined expectations it will
reach parity against the euro.
The dollar fell short of $1.08 per euro earlier this week, for
the third time in as many months. Many now say that most of any
tightening of rates over the next year is priced in.
Elsewhere, the Swiss franc fell another 0.2 percent, hitting
five-month lows against the euro after data showed Switzerland's
foreign currency reserves reached a record high. Growing
reserves suggest the Swiss National Bank has been intervening
more vigorously against the franc.
Sterling was flat against the dollar and the euro on Friday
after the Bank of England's "Super Thursday" of releases. It
sold off then on the Bank of England's concern about the
strength of the pound.
"For the FX market, perhaps the main point was that the strength
of sterling was a real concern for the MPC," said Marshall
Gittler, a strategist with online broker IronFX. "It will take
some time for people to regain confidence in the pound."
Some traders argued one good bet against the pound for the weeks
ahead is the Australian dollar. This week, country's central
bank toned down calls for it to weaken.
"I've gone very short sterling and the Aussie is a good way to
trade that," said one trader. "The RBA is backing away from rate
cuts, and the BoE from rate hikes, and the Aussie has come such
a long way against the pound, there is room for some movement
the other way."
The Aussie, which has almost halved in value against the pound
since 2013, was up half a percent against both sterling <AUDGBP=>
and the U.S. dollar <AUD=D4>.
(Larry King)
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