* Dollar index slips from seven-week highs
* Euro firmer even after dovish ECB comments
* Canadian dollar among worst performers this week
* China trade data in focus
By Ian Chua
SYDNEY, Jan 10 The U.S. dollar eased from a
seven-week high early on Friday as investors booked some profits
ahead of the keenly awaited U.S. jobs report, helping lift the
euro that was briefly unsettled by dovish comments from the
European Central Bank.
The dollar index last stood at 80.953, having
retreated from 81.187, a high not seen since late November.
Traders said the greenback could easily rebound if non-farm
payrolls surprised on the strong side and fuelled expectations
for the Federal Reserve to scale back its bond-buying stimulus
"Ongoing improvement in the labor market may prompt the
Federal Open Market Committee to take a more aggressive approach
in normalizing monetary policy," said David Song, analyst at
But Song said any signs of a further slowdown in wage growth
could actually encourage the Fed to further delay its exit
strategy amid the threat of disinflation.
Against the yen, the greenback slipped to 104.83 from
Thursday's high of 105.06, while the euro bounced to $1.3604
from a one-month low of $1.3548.
The common currency had initially fallen after the ECB
forcefully underlined its determination to take action should
deflation become a real risk or if rising money market rates
threaten the bloc's fragile recovery.
But the euro ran into strong buying interest from a number
of sources and failure to break below chart support around
$1.3525 forced those who had sold earlier to quickly cover their
positions, traders said.
The common currency also climbed against the yen, reaching
143.03 from 142.05. It traded at 142.58 in early
For the week, the Canadian dollar is in contention to be the
worst performer among major currencies, having already shed
nearly 2 percent to its lowest in more than four years.
A string of disappointing domestic data has soured sentiment
for the loonie, which fell as low as C$1.0875 per dollar
, a level not seen since October 2009. It was last at
C$1.0840 per dollar.
The Australian dollar didn't fare as badly although it has
drifted lower through the week. The Aussie traded at $0.8892
, down 0.6 percent on the week. Sentiment for the Aussie
remains fragile after a 14.3 percent slump last year.
For Asia, the focus will be on Chinese trade numbers for a
sense of how global demand is faring. Median forecasts are for
exports to rise 4.9 percent in December, from a year ago, while
imports are seen up 5.3 percent.
This series does tend to surprise, however, and any weakness
will likely pressure commodity currencies such as the Aussie.