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A solid jobs report and a rebound in wages would
favor the dollar by reviving expectations the Fed might raise
rates as early as mid-year. Disappointing jobs data and signs
that wages are not improving would weigh on the dollar, traders
said.
Non-farm payrolls probably added 234,000 jobs last month,
according to a Reuters survey, after gaining 252,000 in
December. That would mark the 12th straight month of job gains
above 200,000, the longest streak since 1994.
"Nothing is more likely to point towards a medium-term rise in
inflation than growing wages," said Esther Reichelt, a currency
strategist at Commerzbank.
"In December, these had recorded a surprise fall, which suggests
we could see a countermove in January. If the wage data
disappoints, the going will get tough for the dollar."
The dollar index was up 0.15 percent at 93.706. It has retreated
over the past couple of weeks after advancing to an 11-year high
of 95.481 on Jan. 23.
The dollar was little changed against the yen at 117.32 yen but
rising against the euro. The single currency was down 0.3
percent at $1.1440, after surging 1.2 percent the previous day,
partly because of talk the Swiss National Bank had bought euros
to weaken the Swiss franc.
Data from the SNB on Friday showed foreign exchange reserves
rose in January to 498.398 billion francs, reinforcing the
impression that it has been intervening to weaken the franc.
The SNB surprised markets by scrapping a three-year-old cap on
the value of the franc of 1.20 francs per euro last month. The
central bank later said that policy would have cost 100 billion
francs to defend in January alone.
"Unofficial SNB intervention in euro/Swiss franc seems likely to
persist, which alongside purchases by the Danish Central Bank
represent a significant marginal buyer (of euros)," said Josh
O'Byrne, currency strategist at Citi.
The Danish crown steadied, recovering from a slip on Thursday
after a fourth interest rate cut in three weeks. The euro was
0.01 percent higher at 7.4440 crowns, with traders citing
intervention by the central bank in recent days to weaken the
crown.
(Editing by Larry King)
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