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 After another frenetic week for financial markets, investors were
trying to catch their breath before U.S. jobs data at 8:30 a.m. ET.
Economists polled by Reuters expected it to show 230,000 new jobs
were added last month and the unemployment rate was unchanged at 5.8
percent.
"We know the employment growth has been decent for a couple of
months now, so if we get close to the consensus, that just confirms
what we already know," said Philip Marey, a U.S.-focused Rabobank
economist.
"So the Fed will want to see 'underemployment' rate fall further and
they want the hourly earnings growth to rebound to 3-4 percent. That
is what is becoming increasingly important."
The dollar hit a seven-year high of 120.335 yen in early European
trading, helped by a Wall Street Journal report that simulations by
Federal Reserve economists suggest it would be best to raise
interest rates promptly. Expectations the Fed will move some time
next year are fuelling the dollar's rally.
Unlike the United States, Europe, China and Japan are all losing
momentum, slowdowns that are weighing on stock markets. Germany's
Bundesbank halved its 2015 growth forecast for Europe's largest
economy on Friday.
The pan-European FTSEurofirst 300 was up 1 percent after a 1.4
percent flop on Thursday, but MSCI's 45-country All World index was
limping towards its first weekly drop in four.
GOLD SHINES
The Russian rouble dropped again this week following more aggressive
rhetoric over Ukraine and a further decline in oil prices. But it
firmed against both the dollar and the euro on Friday, probably on
interventions from the central bank.
It was up as much as 3.3 percent on the day against the dollar in
early trade, then drifted back down. It was up 1.3 percent at 53.7
against the dollar by 4:30 a.m. ET.
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"It's undoubtedly the central bank - more than a billion dollars was
sold in a few minutes," said a dealer of a major Russian bank. "No
one else is in a position to trade such volumes now."
Brent crude was back below $70 a barrel and heading for a 10th
weekly loss out of the past 11. Top oil exporter Saudi Arabia cut
prices again on Thursday, in another sign of the escalating price
war in the market.
In contrast, gold was heading for its biggest weekly gain in 10
months as the prospect of central bank stimulus in the euro zone,
China and Japan boosted demand for the metal as an inflation hedge.
Spot gold was little changed at $1,205.60 an ounce, but there was
also caution ahead of the upcoming U.S. jobs data.
"Should (payrolls) numbers exceed 230,000 it could send gold
tumbling quickly," said Howie Lee, an analyst at Phillip Futures,
adding that support could come in at $1,140.
(Editing by Larry King)
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