FOREX-Dollar firm on U.S. jobs view, Aussie falls on Chinese data

Mon Mar 10, 2014 10:58am EDT

Related Topics

* Greenback steady on hopes of improving labor market

* Weak Chinese trade data knock Canadian, Aussie dollars

* Jitters over Ukraine contained for now

By Richard Leong

NEW YORK, March 10 (Reuters) - The U.S. dollar held steady against major currencies on Monday, supported by hopes U.S. job growth would pick up in the wake of last week's mildly encouraging report on hiring and as tension over Ukraine remained contained.

Meanwhile, the Australian and Canadian dollars lost as much as half a percent against the greenback in the wake of a plunge in exports from China, stoking worries of further weakness in the world's No. 2 economy cutting into global growth.

"Despite some horrendous weather, the U.S. economy was reasonably resolute in February. We might get a strong (payroll) number in March," said Alan Ruskin, global head of G10 currency strategy at Deutsche Bank in New York. "This is a more constructive view on the U.S. economy and the dollar."

The dollar index was little changed at 79.743, holding above four-month lows set prior to Friday's U.S. jobs data that showed a greater-than-forecast 175,000 workers found jobs in February.

The U.S. payrolls report countered a drop-off in expectations of more policy easing from the European Central Bank to keep the yen, dollar and euro in tight ranges. Another bearish batch of figures from Japan had limited impact.

Sterling was the other major mover, suffering from the shift in money market rates in the common currency's favour after the ECB meeting. It slid to 83.35 pence, its weakest in a month against the euro.

The Aussie had been on the way back up towards the end of last week, boosted by signs of improvement in its own economy. But like fellow commodity producer Canada, it depends heavily on China extending a decade of robust expansion.

More doubts are emerging on that front.

Latest numbers showed Chinese exports fell 18 percent year-on-year in February, and authorities in Beijing continued a campaign to halt any further appreciation of the yuan by setting its daily guidance for the currency at the highest since mid-December.

"The Chinese export numbers are the main driver this morning - you can see that the Aussie and Canadian dollars are both under pressure," said Alvin Tann, strategist with French bank Societe Generale in London.

The Aussie traded 0.4 percent lower at $0.9031, while the loonie was down 0.2 percent at $1.1104.

The euro was holding within sight of Friday's 2 1/2-year high of 1.3915 reached after last week's ECB meeting, which quashed hopes for now of more action to stimulate growth.

The single currency last traded $1.3871, down 0.02 percent from late on Friday, while it slipped 0.1 percent against the Japanese yen at 143.16 yen.

Dealers were divided on whether the euro could to break above $1.40 though some noted the lack of a reaction to concerns over its strength expressed by French central banker Christian Noyer.

While traders focused on the U.S. jobs data and ECB's policy path, they were mindful of the tense political situation in Ukraine as Russian forces tightened their grip on Crimea.

"The situation in Ukraine is back on people's minds and one could already see the pressure on emerging markets on Friday after (strong) U.S. non-farm payrolls," Societe Generale's Tann said.

The Russian rouble was steady against the dollar at 36.3725 roubles. It hit a record peak of 36.6750 roubles a week ago on fears of war in Ukraine's Crimean peninsula after Russia's invasion the region.

Analysts still expect diplomacy between the West and Russia to address the situation.

Among other emerging market currencies, the Mexican peso fell 0.3 percent against the dollar at 13.2287 pesos after hitting its strongest level in seven weeks against the greenback on Friday.

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