Bloomberg News

Dollar Falls Versus Majors Before U.S. Jobs Data; Aussie Rises

March 06, 2013

The dollar fell for a second day against most of its major counterparts before a private jobs report in the U.S. forecast to show companies added positions.

The Dollar Index declined for a third day before the Federal Reserve releases its Beige Book report. The euro was little changed against the yen before European Central Bank President Mario Draghi and his board meet tomorrow. Speculation that central banks will continue stimulus helped spur the Dow Jones Industrial Average to a record in New York. Australia’s currency rose for a second session as data showed the nation’s economic growth accelerated last quarter.

“The dollar is being sold in a risk-on trade,” said Kazuo Shirai, a trader at Union Bank NA in Los Angeles. “The Dow Average climbed to a record and Treasuries were sold. The market is waiting for the jobs report.”

The dollar lost 0.1 percent to $1.3062 per euro as of 7:28 a.m. in London after falling 0.2 percent to $1.3052 in New York. It was little changed at 93.34 yen from yesterday when it slid 0.2 percent. The euro traded at 121.93 yen from 121.76.

The Dollar Index (DXY), which Intercontinental Exchange Inc. uses to track the greenback against currencies of six U.S. trading partners, lost 0.1 percent to 81.990.

U.S. companies took on more workers last month after adding the most jobs in almost a year in January, figures from the Roseland, New Jersey-based ADP Research Institute will probably show today.

U.S. Jobs

Firms added 170,000 positions in February, following a 192,000 increase the previous month, economists forecast in a Bloomberg News survey. The Labor Department will release its payrolls data on March 8.

The Swedish krona and New Zealand dollar have led gains this week among 10 developed nation currencies tracked by Bloomberg Correlation Weighted Indexes as optimism about growth in the world’s largest economy spurred demand for higher- yielding assets. The Dow closed at a record 14,253.77 yesterday.

The ECB will probably maintain its benchmark rate at 0.75 percent this week, according to a Bloomberg survey. The central bank will also update its December economic forecasts.

The euro area’s gross domestic product probably fell 0.6 percent in the fourth quarter from the previous three-month period, according to the median estimate of economists surveyed by Bloomberg before the data today. The European Commission sees inflation at 1.8 percent this year and 1.5 percent in 2014.

Anticipate Easing

“‘Since the ECB’s last economic forecast in December, the euro has appreciated, so that could weigh on their outlook for inflation and the market may look to price in more ECB policy easing,” said Peter Dragicevich, a Sydney-based currency economist at Commonwealth Bank of Australia (CBA), the nation’s largest lender. “That probably could weigh on the euro into week’s end.”

Australia’s dollar gained after the nation’s statistics bureau said GDP expanded 0.6 percent in the fourth quarter and revised growth for the previous three months up to 0.7 percent from 0.5 percent previously.

Traders are betting the Reserve Bank of Australia will lower its benchmark 3 percent interest rate by 31 basis points over 12 months, down from wagers on 50 basis points of cuts on March 4, a Credit Suisse Group AG index based on swaps shows.

“We’ve seen market pricing for more rate cuts by the RBA get pared back, and that obviously helps support the Aussie,” said Commonwealth Bank of Australia’s Dragicevich. The GDP data showed “the previous quarter was revised higher, and the annual rate was lifted, so that’s a good outcome.”

The so-called Aussie rose 0.2 percent to $1.0281 after advancing 0.6 percent yesterday.

To contact the reporters on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net


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