US dollar stuck in tight range

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Graphic: Renjith Krishnan.

Tokyo - The dollar moved narrowly against the yen and euro in Asia on Friday as investors await US jobs data later in the day for clues about the state of the world's largest economy.

The US currency fetched 102.95 yen in Tokyo midday trade, a shade lower than 103.08 yen in New York Thursday afternoon, but up from 102.72 yen in Tokyo earlier Thursday.

The euro, which gained Thursday on the European Central Bank's upbeat outlook on the eurozone economy, slipped to $1.3856 and 142.67 yen from $1.3861 and 142.88 yen.

The ECB on Thursday held its interest rates unchanged for the fourth month in a row, assessing that the nascent recovery in the bloc remains on track.

Most economic data released recently suggest that the spectre of deflation - the destructive spiral of falling prices in which consumers put off purchases, thus destroying salaries, jobs and investment - is being kept at bay.

But investors were watching to see if policymakers would pull the trigger on further easing measures.

“Forex markets were more interested in what the ECB did with its growth and inflation forecasts,” rather than the Ukraine crisis, National Australia bank said in a note.

The United States and Russia are working to resolve the crisis in Eastern Europe, which flared when lawmakers agreed to sending troops into the mainly Russian-speaking Crimean peninsula after the ousting of Ukraine's pro-Moscow government.

The dollar won support from data that showed jobless benefit claims fell last week to a three-month low, raising expectations for a strong monthly employment report later Friday.

“If nonfarm payrolls are disappointing again, the pair will likely pull back to around 102.50 yen after the recent gains,” Osao Iizuka, head of FX trading at Sumitomo Mitsui Trust and Banking, told Dow Jones Newswires.

But sharp declines in the greenback were unlikely as the market has factored in a possibly weak figure due to harsh winter weather, he added. - Sapa-AFP


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