* Dollar index slips from seven-week highs as payrolls
* Euro finds its footing after slip on dovish ECB comments
* Canadian dollar among worst performers this week
* China trade data underpins Aussie
By Lisa Twaronite and Ian Chua
TOKYO/SYDNEY, Jan 10 The U.S. dollar inched away
from a seven-week high on Friday as investors booked some
profits ahead of the keenly-awaited U.S. jobs report, while the
euro found firmer footing after it was unsettled by dovish
comments from the European Central Bank.
The dollar index last stood at 80.920, down 0.1 on
the day, having retreated from a high of 81.187 on Thursday, its
loftiest level since late November.
Traders said the greenback could easily rebound if non-farm
payrolls surprised on the strong side and fuelled expectations
that the Federal Reserve will scale back its bond-buying
stimulus more quickly.
Economists polled by Reuters forecast that employers
probably added 196,000 jobs, down from 203,000 in November,
while the jobless rate likely held at a five-year low of 7.0
On the other hand, a downside surprise could bolster the
yen, and sideline Japanese exporters, who sell dollars to
repatriate overseas earnings, market participants say.
"The exporters are not in a rush, and are only going to be
doing the minimal operations at the fixing. They're fine --
they're hedged on the downside," said a trader at a Japanese
bank on Tokyo.
From September onward, exporters have been hedged between
95/98 yen, while in November/December, some of the larger
exporters hedged at 100/102 yen, she said.
Against the yen, the greenback edged up slightly to 104.92
, but was still shy of Thursday's high of 105.05 yen and a
five-year high of 105.45 yen hit earlier last week as the
improving U.S. economic outlook heightened expectations that the
Fed will speed up its stimulus reduction.
Janet Yellen, set to take over as head of the Fed next
month, is "hopeful" that U.S. economic growth will accelerate in
2014 to reach 3 percent or more and persistently low inflation
will move up toward the central bank's target, she was cited
saying in a Time magazine interview published online on
"Most of my colleagues on the Fed's policymaking committee
and I are hopeful that the first digit (of GDP growth) could be
3 rather than 2," Yellen said in the interview.
The euro rose as high as $1.3616 and was last slightly up
on the day at $1.3611, moving away from a one-month low
of $1.3548 touched overnight and back toward a two-year high of
$1.3894 set at the end of last month.
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.
"The Governing Council strongly emphasises that it will
maintain an accommodative stance of monetary policy for as long
as necessary," ECB President Mario Draghi said after the
decision to leave the main interest rate at 0.25 percent.
But the euro ran into strong buying interest, traders said.
Its failure to break below chart support around $1.3525 forced
those who had sold earlier to quickly cover their positions.
The common currency also climbed against the yen, up about
0.1 percent on the day at 142.77 yen, but still well
short of its five-year peak of 145.67 yen set last month.
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
on Thursday, a level not seen since October 2009. It
was last at C$1.0847 per dollar, up slightly on the day.
The Australian dollar didn't fare as badly although it has
drifted lower through the week. The Aussie has shed 0.6
percent for the week with sentiment remaining fragile after a
14.3 percent slump last year.
The Aussie traded at $0.8898, slightly higher on
the day, underpinned by trade data from China, Australia's key
China's export growth slowed more than expected in December
due to a higher comparison base a year earlier and a clampdown
on speculative activities. But China posted an 8.3 percent jump
in imports versus forecasts of 5.3 percent, and the outlook for
trade in 2014 is expected to be brighter as global demand picks