* Nonfarm payrolls report could disappoint dollar
bulls-strategist
* Yellen’s dovish speech still pressuring greenback
* Yen logs best quarterly performance since 2009
* Surprising upbeat China manufacturing PMI underpins Aussie
By Lisa Twaronite
TOKYO, April 1 The dollar found some respite on
Friday after steep quarterly losses against major rivals, as
investors awaited a U.S. nonfarm payrolls report that could give
clues to the monetary policy outlook.
Against the yen, the dollar slipped about 0.3 percent to
112.28 after skidding more than 6 percent in the first
quarter, its biggest loss since the third quarter of 2009, as
market turmoil sent investors into the perceived safety of the
Japanese currency.
That trend continued on Friday, after a downbeat business
survey helped send Japan’s Nikkei stock index plunging
on the first day of the country’s fiscal year.
The Bank of Japan’s quarterly tankan survey of business
confidence, published earlier on Friday, showed large
manufacturers’ business sentiment deteriorated to its lowest
level in nearly three years and was expected to worsen in the
coming quarter.
Large manufacturers expect the dollar to average 117.46 yen
in the fiscal year which began on Friday, the tankan survey
showed.
The dollar dropped as low as 112.06 in the morning session,
before bouncing back.
“The 112 level is holding up, and people were buying on the
dip, so there is clearly some real demand for dollars around
this level,” said Kaneo Ogino, director at foreign exchange
research firm Global-info Co in Tokyo.
The euro was steady at $1.1376, after gaining more
than 4 percent for the quarter and hitting a more than 5-month
high of $1.4120 on Thursday.
The dollar index, which tracks the greenback against a
basket of six rival currencies, edged up about 0.1 percent to
94.677, after shedding more than 4 percent in the first
quarter for its worst performance since the third quarter of
2010.
It notched a five-month low of 94.319 in the previous
session.
On Tuesday, Fed Chair Janet Yellen highlighted risks to the
global economy in a speech, and said the Fed should proceed
“cautiously” on raising interest rates, quashing the hopes of
those who expected a hike sooner rather than later.
Lower U.S. yields undermined the dollar, as Treasuries
marked their best quarter in 4-1/2 years.
The nonfarm payrolls report is expected to show that
employers added 205,000 jobs in March.
“We believe that dollar bulls will be sorely disappointed by
tomorrow’s report for a number of reasons,” Kathy Lien, managing
director at BK Asset Management in New York, said in a note to
clients on Thursday.
“Non-farm payrolls is only important when it can be a game
changer for Federal Reserve policy but Janet Yellen made it very
clear that they have no intention of raising interest rates in
April and unless there’s significant improvements at home and
abroad, rates will remain steady in June as well,” Lien said.
After Yellen’s speech, interest rates futures implied a
majority of traders saw only a 5 percent chance of a rate
increase at the Fed’s next policy meeting on April 26-27.
The Australian dollar edged down about 0.1 percent
to $0.7647, but remained not far from a nine-month peak of
$0.7723 set on Thursday, underpinned by surprisingly upbeat
Chinese manufacturing surveys.
Aided by a dovish Fed, the Aussie gained 7.2 percent last
month, its largest monthly rise since 2011.
Chinese manufacturing activity expanded in March for the
first time in nine months, with the official Purchasing
Managers’ Index (PMI) squeaking above the boom-or-bust threshold
to 50.2. A private PMI survey also beat forecasts and rose to
its highest in 13 months.
(Editing by Simon Cameron-Moore)
Article source
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