* Euro remains well off recent 2-month low after Draghi
reassures on deflation
* Aussie edges down after RBA raises growth, inflation
By Lisa Twaronite
TOKYO, Feb 7 The dollar edged lower in a quiet
Asian session on Friday, as most investors looked ahead to the
latest non-farm payrolls report for clues on the health of the
U.S. labour market and the broader economy.
After the recent rout in emerging markets sparked large
moves, a semblance of calm characterized Friday's trading before
the next big test.
The payrolls data, which is due later Friday, is expected to
show that employers added 185,000 jobs in January, according to
the median estimate of 101 economists polled by Reuters.
"I think it's a big number. This will be large in confirming
the weaker number trend, or the turn of the tide," said Bart
Wakabayashi, head of forex at State Street Global Markets in
On the other hand, he said, the big picture is intact, in
that no matter what the jobs reports shows, markets are pricing
in the eventual end of the U.S. Federal Reserve's stimulus.
"I think in general, people are in agreement that it's not a
tapering story as opposed to just a reevaluation of their
positions," Wakabayashi said.
Concerns about the Fed's tapering and slowing growth in
China were big drivers of the recent selloff in emerging
The dollar inched down against a basket of currencies
to 80.885, and shed about 0.1 percent against its Japanese
counterpart to 102.03 yen.
Even if labour conditions improve, Boston Federal Reserve
President Eric Rosengren said late Thursday that the central
bank should be "quite patient" in removing stimulus because
broader measures of the U.S. labour market remain weak.
Rosengren, considered a dovish Fed official, said the labour
market conditions remain far from those which would warrant
higher interest rates.
"Tapering is a foregone conclusion," Marvin Loh, a senior
fixed-income market strategist at Bank of New York Mellon Global
Markets, said at a seminar in Tokyo on Friday.
He expects the Fed will end its quantitative easing program
by the third quarter of 2014. By then, he said, the yield on the
benchmark 10-year Treasury will rise to around 3.25
percent, and could rose to 4 percent by the middle of 2015.
The number of Americans filing new claims for unemployment
benefits fell more than expected last week, data showed on
Thursday, dropping by 20,000 new claims.
Other data released on Thursday showed U.S. exports
weakening in December, which could drag on growth if that trend
were sustained into the first quarter.
The euro was steady against the greenback after rallying to
a one-week high of $1.3619 on Thursday, following
European Central Bank President Mario Draghi's comment that the
euro zone is not plagued by deflation.
The ECB left interest rates unchanged at its policy meeting
on Thursday, opting to wait for more data before taking action.
Euro zone inflation eased to 0.7 percent last month and
retail sales on Wednesday fell short of expectations, while
recent upbeat business sentiment surveys add up to a mixed
picture of economic conditions in the euro zone.
The euro was steady on the day at $1.3588, well off a more
than two-month low of $1.3475 plumbed on Monday. It gave up
about 0.1 percent against the yen to 138.64 yen,
though it remained above a more than two-month low of 136.20 yen
hit on Tuesday.
The Australian dollar took a breather from a bounce
this week, edging down about 0.2 percent to $0.8940. It had
moved up earlier after the Reserve Bank of Australia raised its
forecasts for economic growth and inflation for 2014 in its
latest quarterly report on monetary policy.
The Aussie dropped about 14 percent against its U.S.
counterpart last year, partly due to Fed tapering and partly to
the RBA's campaign to talk down its currency. It surged over
half a U.S. cent on Tuesday, after the RBA dropped its bias
towards easing policy and toned down its rhetoric calling for a