* Dollar index holds above recent 8-week low
* Solid U.S. private-sector hiring lifts hope for nonfarm
* Aussie dollar falls after RBA's Stevens warns on currency
(Adds comments, updates prices)
By Ian Chua and Masayuki Kitano
SYDNEY/SINGAPORE, July 3 The dollar held firm
above a recent eight-week low on Thursday, supported by hopes
for a healthy rise in nonfarm payrolls, while the Aussie fell
after Australia's central bank chief warned that markets are
underestimating the risk of a sharp fall in the currency.
Figures from U.S. payrolls processor ADP released on
Wednesday added to a string of bullish U.S. data ranging from
manufacturing to auto sales, supporting the view that the U.S.
economy has bounced back smartly after a first-quarter slump.
Benchmark U.S. Treasury yields rose to the
highest in over a week at 2.63 percent on Wednesday in reaction
to the data, which in turned helped lift the dollar against a
basket of major currencies.
The dollar index inched up about 0.1 percent to 79.999
, having pulled up from an eight-week trough of 79.740
plumbed on Tuesday.
Against the yen, the greenback rose 0.1 percent to 101.87
yen, having only recently hit a six-week low near 101.23.
ADP said private employers added 281,000 workers to payrolls
last month, the largest since November 2012, offering hopes for
a healthy rise in nonfarm payrolls when the data is released
later on Thursday.
"Our economists agree with market consensus looking for
non-farm payrolls to rise by more than 200,000 for a fifth
consecutive month," analysts at BNP Paribas wrote in a note to
"If the forecast turns out to be correct, this will mark the
first five-month run of above 200,000 prints since January
The euro eased 0.1 percent to $1.3648. The single
currency hovered below a six-week high of $1.3701 set earlier
this week, as the market turned its focus to a meeting by the
European Central Bank later on Thursday, as well as the U.S.
The ECB is unlikely to take fresh policy action at its July
gathering after cutting interest rates to record lows last month
- the deposit rate to below zero - and revealing a 400
billion-euro ($545.62 billion) loan programme.
"Although no action is expected from the ECB at its meeting
today, we anticipate that it will maintain its dovish tone in
the face of weak PMI prints, low inflation, and weak bank
lending," said analysts at BNP Paribas.
The Australian dollar fell 0.7 percent to $0.9377.
The Aussie pulled further away from an eight-month peak of
$0.9505 set on Tuesday, coming under pressure after Reserve Bank
of Australia Governor Glenn Stevens warned investors they were
underestimating the risk of a significant fall in the Australian
A weak reading on Australian retail sales also added to the
already soft tone of the Aussie dollar, which had retreated on
Wednesday on profit-taking in the wake of disappointing
Australian trade data.
The Aussie's drop below $0.9400 triggered stop-loss selling,
said Jeffrey Halley, FX trader for Saxo Capital Markets in
"Basically, Governor Stevens timed his talking down of the
Australian dollar perfectly to coincide with a soft market,"
While the Aussie may find some support at levels around
$0.9370 and $0.9355, a drop to $0.9300 is now on the cards,
(Additional reporting by Naomi Tajitsu in Wellington; Editing
by Shri Navaratnam)