* Dollar index near 8-month low
* Tuesday's U.S. payrolls data in focus
* Euro within sight of 2013 high
* Dollar/yen in triangle holding pattern
By Hideyuki Sano and Masayuki Kitano
TOKYO/SINGAPORE, Oct 21 The dollar was mired
near an 8-month low against a basket of currencies on Monday on
growing expectations the U.S. Federal Reserve will have to delay
scaling back its stimulus following a 16-day government
The dollar index held steady at 79.675 , not
very far from a trough of 79.478 touched on Friday, its lowest
level since February.
"In the last two months, previous payrolls figures were
revised down. The U.S. economy is losing steam and cannot
withstand tapering," said Daisuke Uno, chief strategist at
Sumitomo Mitsui Bank.
"There will be disappointment at every Fed meeting for the
rest of the year, and each time the dollar will weaken," he
The Fed has two policy meetings scheduled this year, one on
Oct. 29-30 and the other on Dec. 17-18.
A majority of market players now expect the Fed will begin
reducing stimulus next year, though some analysts believe
tapering of its bond-buying programme is still possible in
Expectations of a delay in reducing the Fed's stimulus is
likely to strengthen unless a run of upcoming U.S. data shows
that the economy somehow gained momentum despite the disruption
caused by the government shutdown.
Traders are now looking to September U.S. payrolls due on
Tuesday, with the market forecasting a jobs gain of 180,000,
although the data will shed little light on the impact of the
policy paralysis in Washington.
The euro fetched $1.3678, down 0.1 percent on the
day. The euro had hit an eight-month high of $1.3704 on Friday
on trading platform EBS, almost touching this year's peak of
While the euro is likely to stay firm, the speed of its
rise could slow since speculators have already piled up bullish
bets on the euro, said Mitul Kotecha, head of global foreign
exchange strategy for Credit Agricole in Hong Kong.
"I think that just might frustrate the ability to increase
long positions again in euros," Kotecha said.
Data on currency futures positions on the Chicago Mercantile
Exchange shows that speculators had increased their net long
position in the euro to 65,844 contracts in the week to Sept.
24, the highest since May 2011.
Against the yen, the euro edged up 0.1 percent to 133.99 yen
, hovering near a four-year peak of 134.95 yen set in
The dollar edged up 0.2 percent against the yen to 97.95 yen
, but was still some ways off from a near three-week high
of 99.01 yen set last Thursday.
The dollar/yen pair has been in a triangle holding pattern
after hitting a five-year high of 103.74 yen in May as
yen-selling propelled by the Bank of Japan's aggressive monetary
easing has run its course.
Many traders expect the dollar to remain in this holding
pattern for the moment, though the risks for the greenback could
grow if it breaks below its key 200-day moving average,
currently at 97.18 yen.
"The basic backdrop is that we are in a risk-on situation,
with both the yen and the dollar weak," said Koji Fukaya, CEO at
FPG Securities in Tokyo, adding that the dollar could stay
range-bound versus the yen for the time being.
The Australian dollar held near four-month highs as the
currency benefitted from rising risk appetite after U.S.
lawmakers struck a deal last week to avert a U.S. debt default.
The Aussie eased 0.1 percent to $0.9662, staying
near Friday's four-month high of $0.9680.
Against the yen, the Aussie dollar touched a four-month high
94.76 yen earlier on Monday and was last up 0.2
percent on the day at 94.66 yen.