Friday, September 4, 2009

Dollar Near One-Week Low Versus Pound Before U.S. Jobs Report

Sept. 4 (Bloomberg) -- The dollar traded near a one-week low against the pound before a U.S. government report forecast to show employers eliminated fewer jobs last month, sapping demand for the greenback as a refuge from the global recession.

The yen weakened against 14 of 16 major counterparts on speculation Asian stocks will extend a global equity rally, spurring demand for higher-yielding assets. The euro headed for a fourth weekly loss versus the Swiss franc after European Central Bank President Jean-Claude Trichet said the region’s economic recovery will be bumpy. U.S. employers cut 230,000 jobs in August, a Bloomberg survey of economists shows.

“We’re very upbeat on payrolls, as we’re way above the market at minus 150,000,” said Sean Callow, senior currency strategist at Westpac Banking Corp. in Sydney. “If we’re right on the upside surprise, the U.S. dollar might soften a bit.”

The dollar traded at $1.6333 per pound as of 8:29 a.m. in Tokyo from $1.6319 in New York yesterday, when it fell to $1.6413, the lowest level since Aug. 25. The U.S. currency bought 92.71 yen from 92.64 yen, and was poised for a fourth weekly loss, the longest stretch since December.

The euro bought $1.4257 from $1.4252 in New York yesterday, and fetched 87.29 British pence from 87.29 pence. Europe’s single currency was at 1.5145 francs from 1.5144 francs.

U.S. Employers

The Labor Department may say today the U.S. unemployment rate rose to 9.5 percent last month, matching the highest level since 1983, according to the median estimate in a Bloomberg News survey of 77 economists. Employers cut 247,000 workers in July.

U.S. Treasury Secretary Timothy Geithner told reporters on Sept. 2 in Washington that it’s “too early” for the Group of 20 nations to scale down efforts to boost growth. A meeting of G-20 finance ministers and central bankers begins today in London.

Japan’s currency may decline for a second day versus the euro as futures on the Nikkei 225 Stock Average expiring in September closed at 10,235 in Chicago yesterday, higher than 10,230 in Osaka. The MSCI World Index gained for the first time in four days yesterday, rising 0.5 percent.

Benchmark interest rates of 0.1 percent in Japan and as low as zero in the U.S. compare with 3 percent in Australia and 2.5 percent in New Zealand, attracting investors to assets in the South Pacific nations.

ECB’s Trichet

The euro headed for its first weekly decline versus the pound since Aug. 7 after ECB’s Trichet warned yesterday of a “rather uneven” recovery even as the central bank raised its growth forecasts. The bank left its target lending rate at a record low of 1 percent.

ECB officials are in no rush to withdraw emergency stimulus, said Trichet at a press conference in Frankfurt. The central bank did raise its economic forecasts for the 16-nation euro region to predict growth of about 0.2 percent in 2010 instead of a 0.3 percent contraction.

“There’s probably some disappointment that they didn’t upgrade growth more,” said Richard Franulovich, a senior currency strategist at Westpac in New York. “Evidently the market was looking for something a bit more hawkish.”