FOREX-Dollar dips in wake of jobs data; ECB comments lift euro

Mon Apr 7, 2014 10:38am EDT

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(Updates prices, adds analyst comments, changes byline, changes dateline from LONDON)

* Yen supported as BOJ begins two-day policy meeting

* Dollar nurses losses as jobs report disappoints bulls

* Euro moves up after ECB's Nowotny comments

By Sam Forgione

NEW YORK, April 7 (Reuters) - The dollar fell against major currencies on Monday after last week's slightly lower-than-expected U.S. payrolls data, while European Central Bank policymakers' comments curbed expectations for more stimulus and boosted the euro.

U.S. employers added 192,000 jobs in March after adding 197,000 in February, the Labor Department said Friday. The unemployment rate was unchanged at 6.7 percent. Economists had expected a gain of 200,000 jobs last month.

The U.S. employment reading disappointed some who had bet that a stronger report would reinforce a Federal Reserve increase in interest rates, which would lift the dollar in the months ahead.

"The disappointment in the jobs data on Friday has soured sentiment" toward the dollar, said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Connecticut.

Fed Chair Janet Yellen suggested in a press conference on March 19 that the U.S. central bank could raise interest rates earlier than expected. Overnight rates are currently near zero.

"Any perceived delay in the start of Fed tightening is negative for the dollar," said Gilmore.

On Monday, comments from ECB policymakers Ewald Nowotny and Yves Mersch suggested more monetary easing from the central bank was not imminent, which lifted the euro against the dollar.

Nowotny said there was no need to act immediately to counter euro zone disinflation, while Mersch said that while the central bank was drawing up plans for large-scale asset purchases, it remained some way off.

The euro has been pressured since ECB governing council member and Bundesbank chief Jens Weidmann said on March 25 that negative interest rates would be more appropriate to use to counter a higher exchange rate.

At its April meeting in Frankfurt, the ECB opened the door to using quantitative easing and other monetary policies meant to rescue the euro zone from worringly slow inflation.

Nowotny and Mersch's comments on Monday signaled that there was resistance to imminent quantitative easing, said Gilmore of Foreign Exchange Analytics.

The dollar also lost ground against the Japanese yen, having gained in the two weeks before Friday's payrolls numbers, in the wake of the U.S. jobs data. The prospect of more money-printing in Japan, however, limited Monday's moves as the Bank of Japan began its two-day policy meeting.

"The yen recovered on the heels of Friday's U.S. payrolls report," Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said in a research note. "However, there does seem to be mounting pressure building for some form of monetary easing by the BOJ."

The U.S. dollar index, which measures the greenback against six major currencies, was last down 0.2 percent at 80.26. The euro was up 0.23 percent against the dollar to trade at $1.3736, while the dollar was down 0.07 percent against the yen at 103.22.

(Additional reporting by Patrick Graham in London)

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