* Dollar bears back off a bit as September U.S. jobs data looms
* Report delayed from early Oct due to U.S. govt shutdown
* Any upside surprise could help USD rebound
By Ian Chua
SYDNEY, Oct 22 (Reuters) - The U.S. dollar found its footing in early Asian trading on Tuesday, holding above eight-month lows as investors hedged their bets in case the delayed U.S. payrolls report for September was stronger than expected.
The dollar index , which tracks the greenback’s performance against a basket of major currencies, edged up to 79.725, holding above Friday’s trough of 79.478 but still nursing losses of more than 1 percent since Wednesday.
The dollar has been hit hard as investors bet this month’s 16-day government shutdown would have taken a toll on the world’s biggest economy, forcing the Federal Reserve to maintain its massive stimulus program until next year.
Chicago Federal Reserve President Charles Evans said as much when he told CNBC television it would be “tough” for the Fed to have enough confidence in the economy by its December meeting to start scaling back stimulus.
Analysts polled by Reuters expect payrolls to have increased by 180,000 in September, with the jobless rate steady at 7.3 percent. The data, which was due out earlier this month before being delayed by the shutdown, will be released at 1230 GMT.
“The non-farm payrolls report may spur a more meaningful rebound in the dollar as the U.S. economy is expected to add another 180,000 jobs in September,” said David Song, currency analyst at DailyFX.
“However, we’ll need to closely watch the participation rate and its impact on the unemployment rate ... the dollar may struggle to hold its ground should we see more discouraged workers leave the labour force.”
While analysts agree it would probably take a few months to get a clear picture of the U.S. labour market following the shutdown, they say investors will probably use any strength in the data as an excuse to buy the dollar.
Against the yen, the greenback nudged up to 98.20, pulling away from a one-week trough of 97.55 plumbed Friday.
The euro slipped to $1.3676, retreating from an 8-1/2 month high of $1.3704 hit last week. A break higher there would set up the common currency to test its 2013 peak of $1.3711, and beyond that levels not seen since late 2011.
The Australian dollar also took a step back to $0.9654 from a 4-1/2 month high of $0.9680. A move above 97 U.S. cents would see the Aussie retrace half of its April-to-August fall and open the way for an attempt to move back to parity.
With several currencies near crucial chart levels, traders said it was no surprise that investors were taking a more cautious approach ahead of the payrolls report.
The longer-term outlook for the dollar remained somewhat murky, not least given the risk of a repeat of this month’s standoff in Washington that took the United States to the brink of a historic default.
U.S. lawmakers will lock horns again in February to approve lifting the government’s borrowing limit.