Dollar hits 3-month high against pound, focus on jobs
Monday, August 30, 2004 6:28:49 AM
reuters.com
By David McMahon
TOKYO, Aug 30 (Reuters) - The dollar rose to a three-month high against the sterling on Monday after U.S. economic data eased concerns that surging oil prices threatened growth, underpinning expectations of more rises in U.S. interest rates.
The dollar rose against most major currencies, but traders felt the U.S. currency's gains would be limited this week, at least until U.S. jobs data on Friday.
"There's no doubt this week's big focus is the jobs data, especially considering the impact on the market that June and July's weaker-than-expected figures had," said Ko Haruki, head of institutional currency sales at HSBC in Tokyo.
At 0545 GMT, sterling was at $1.7860 <GBP=>, having lost around 0.24 percent on the day and touched a trough of $1.7857, its lowest level since May 24.
The dollar was at 110.24/28 yen <JPY=>, up around 0.5 percent from late New York trade on Friday.
"The dollar looks pretty strong across the board today, although I don't think there's that much behind it apart from position adjustments," said Jake Moore, currency strategist at Barclays Bank.
The euro hovered at three-week lows around $1.2004/07. A drop below key support at around $1.1968 would carry it to its lowest level in 2-½ months.
The dollar gained 0.9 percent against the euro on Friday after data showed U.S. gross domestic product (GDP) grew an annualised 2.8 percent in the second quarter, in line with economists' forecasts.
Elsewhere, the final University of Michigan consumer sentiment number for August came in at 95.9, higher than a 94.0 forecast.
Traders said they saw little speculative movement in Tokyo trading time and attributed that to a public holiday in London.
U.S. DATA IN FOCUS
The GDP and consumer data kept alive expectations of a continued "measured" monetary tightening by the Fed, and traders were now focusing on non-farm payrolls for August.
The August jobs data will be of particular interest following a surprisingly weak number for July, which showed U.S. non-farm payrolls rose just 32,000 against analysts' forecasts of a rise of slightly more than 200,000.
A Reuters poll of analysts returned a consensus expectation of 150,000 jobs added in August.
"I think anywhere between 100,000 and 150,000 would not be such a bad result for the dollar. Anything under 100,000 and the dollar would be vulnerable to a sell-off, and above 150,000 would be a pretty clear buy signal," said HSBC's Haruki.
Barclay's Bank is expecting 200,000, an outcome that would support the dollar and probably trigger the beginning of a move towards its May low against the euro of around $1.1770, Moore said.
Ahead of the jobs data, traders will be taking a look at U.S. personal income and consumption data for July due later on Monday and a host of indicators later in the week, including the Conference Board's index of consumer confidence, due on Tuesday.
Some traders said they were keeping an eye on the Republican National Convention in New York this week to see if it would spur safe-haven buying of other currencies.
The Swiss franc was trading at $1.2826 <CHF=>, little changed from its level in late New York. The dollar gained 0.8 percent against the Swiss franc on Friday. |
