Dollar steady in Asia ahead of US jobs data

The dollar was steady in Asia Friday as investors held their breath ahead of key US jobs data, amid concern markets may have become over-confident about prospects for a quick economic recovery.

The dollar was stable at 92.67 yen in Tokyo morning trade against 92.64 yen in New York late on Thursday. The euro was little changed at 1.4256 after 1.4252 and at 132.14 yen from 132.04.

Currency traders took to the sidelines ahead of the August non-farm payrolls report, which is expected to show that the US economy shed 230,000 jobs last month, down from 247,000 in July.

"If realised this would be the least negative reading since August 2008," noted Rabobank International analyst Adrian Foster.

But even recent upbeat economic data have failed to impress financial markets, reflecting concerns that stocks may have risen too far, too fast given the still-uncertain outlook for the global economy.

Worries about the weak labour market were stirred by numbers showing new claims for unemployment benefits in the United States remained stubbornly high at 570,000 in the week ending August 29 -- worse than markets had expected.

An improvement in the jobs market is seen as vital for a recovery in consumer spending -- a key driver of overall economic growth.

There is "doubt about whether US households will increase spending much and contribute to a sustainable economic recovery," NAB Capital strategist John Kyriakopoulos wrote in a note.

The euro failed to get more than a short-lived boost after the European Central Bank left its record low interest rates unchanged at 1.0 percent and offered a cautiously upbeat economic outlook.

ECB head Jean-Claude Trichet "disappointed expectations by saying the recovery would be bumpy and upgrading growth forecasts only marginally," Kyriakopoulos noted.

Investors will also focus on a weekend meeting of finance ministers and central bank chiefs from 20 major economies in London for clues on whether they will scale back emergency stimulus measures and curb executive bonuses.

"This meeting is unlikely to be a headline grabber but any comment on 'exit strategies' for major central banks would be received with interest," said Foster.

Source: AFP

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