FOREX-Dollar, yen recover on growth, earnings worries
* Boost to riskier currencies from U.S. jobs data fades * Stock markets ready for earnings season * World Bank warns on China, Aussie dollar hits 3-month low * Spain tops agenda as euro zone finance ministers meet By Jessica Mortimer LONDON, Oct 8 (Reuters) - The dollar and the safe-haven yen rose on Monday on concerns about the outlook for the global economy and company earnings, recouping losses from the previous session that followed strong U.S. jobs data. Investors were cautious as the third-quarter earnings season gets under way and after the World Bank cut its growth forecasts for the East Asia and Pacific region, warning a slowdown in China could get worse. The euro fell ahead of a meeting of euro zone finance ministers as the euro zone's permanent bailout fund is launched. Spain is expected to top the agenda at the gathering in Luxembourg as uncertainty continues about when the country may ask for a bailout. The euro was down 0.5 percent at $1.2966, pulling away from Friday's two-week high of $1.3072 hit after data showing the U.S. unemployment rate fell to its lowest since January 2009 boosted demand for riskier assets. Traders said profit-taking set in on Monday, pushing the single currency lower, although bids around $1.2950 were expected to limit losses. "People did not want to add to long risk positions ahead of the long weekend, plus we have earnings season coming up so they are starting the week on the cautious side," said Hans Redeker, head of global currency strategy at Morgan Stanley. Currency trading in the U.S. was expected to be thin on Monday as bond markets will be closed for the Columbus Day holiday. Share markets will be open, however. The higher-yielding Australian dollar - particularly sensitive to concerns about China given the countries' close trading links - dropped to a three-month low of $1.0149. The euro slid more than 1 percent against the yen , reaching a session low of 101.30 yen on trading platform EBS, with traders reporting selling by a U.S. investment bank. It was also weighed down by comments by German Finance Minister Wolfgang Schaeuble on Sunday that Chancellor Angela Merkel's trip to Greece this week did not necessarily mean Athens would receive the next tranche of aid under its bailout. Morgan Stanley's Redeker expected the euro to pick up as the European Central Bank's plan to buy peripheral bonds pushed down Spanish borrowing costs. He expected chart support for the euro from $1.2975 to $1.2945 and said Morgan Stanley expects the euro to rise to $1.34 by year-end. Uncertainty over when Spain will request aid has weighed on the common currency because it do that before the ECB can start buying its bonds. The euro has climbed around 7.8 percent since hitting a two-year low of $1.2042 in late July, bolstered by hopes for ECB action to help quell the region's sovereign debt crisis. DOLLAR FALLS VERSUS YEN The dollar was up 0.3 percent against a basket of currencies, with its index at 79.560. However, it fell against the yen, erasing some of Friday's gains. The dollar was down 0.45 percent at 78.30 yen, off Friday's high of 78.88 yen when a rise in U.S. bond yields after the U.S. jobs data pushed it higher. "The impression I get is just above 79 there's a lot of sellers," said Mitul Kotecha, head of global foreign exchange strategy for Credit Agricole in Hong Kong. He said Friday's data would not be enough to convince market participants that the U.S. jobs market was headed toward a strengthening recovery. According to a business sentiment survey published by the Bank of Japan last week, the average dollar/yen exchange rate assumption that major Japanese manufacturers are using in their business plans for the six months to March 2013 is 78.97 yen. That suggests Japanese exporters may want to sell the dollar if it rises beyond that threshold, although they are unlikely to be active on Monday, with Japanese markets also closed for a holiday.
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