Yen under pressure, eyes on U.S. jobs data

SYDNEY Thu Nov 1, 2012 6:48pm EDT

Euro notes are pictured at a bank in this photo illustration taken in Seoul June 18, 2012. REUTERS/Lee Jae-Won

Euro notes are pictured at a bank in this photo illustration taken in Seoul June 18, 2012.

Credit: Reuters/Lee Jae-Won

SYDNEY (Reuters) - The safe-haven yen stayed under pressure on Friday, while commodity currencies held solid gains as investors bet on an upbeat U.S. payrolls report after private employers added jobs at the fastest pace in eight months.

Payrolls processor Automatic Data Processing said private employers added 158,000 workers last month, bolstering hopes that a closely watched nonfarm payrolls data due 1230 GMT would also surprise on the upside.

That saw the yen come under broad pressure, and lit a fire under commodity currencies like the New Zealand dollar. The greenback bought 80.16 yen, having powered to a high of 80.21, while the euro climbed to a one-week high around 104.00.

Against the dollar, the single currency lost a bit of ground to stand at $1.2941, but it remained well within the $1.2800/3200 range seen since September.

Traders expect little market action in Asia given a dearth of major data, leaving the focus firmly on U.S. jobs as well as a raft of manufacturing surveys from the likes of Germany, France and Italy.

A Reuters poll showed analysts expect a rise of 125,000 U.S. nonfarm payrolls in October. The unemployment rate is seen ticking up to 7.9 percent.

"More important will be the unemployment rate we think, and whether the sharp fall in September, from 8.1 percent to 7.8 percent, is reversed," said Kiran Kowshik, strategist at BNP Paribas.

"A print of 8.0 percent or above could weigh on USDJPY."

Still, Kowshik said market reaction to the jobs data will probably lack conviction given the proximity of the November 6 U.S. Presidential election and the November 8 Chinese Congress that will usher in a new generation of leaders.

"Hence we would expect a grind lower in USD at best (rather than a more forceful move) against the commodity currencies and GBP next week."

The big winners were commodity currencies, with the Australian dollar popping above $1.0400, flirting with the October peak of $1.0412. A break there would pave the way for a retest of the September 28 high of $1.0474, then $1.0500.

The New Zealand dollar performed solidly as well, rising to a one-month high of $0.8280.

Other U.S. data out on Thursday, including a drop in new claims for jobless benefits and a sharp improvement in consumer confidence, also underpinned risk appetite, which helped U.S. stocks .SPX rise more than 1 percent.

(Editing by Wayne Cole)

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