* Major currencies in holding pattern as post-jobs lull sets
* Dollar index holds below 10-1/2 month peak
* RBA policy review next in focus, no policy action expected
By Ian Chua
SYDNEY, Aug 5 The U.S. dollar was stuck below a
10-1/2 month peak against a basket of major currencies early on
Tuesday, having lapsed into uneventful trade in the usual
post-payrolls data lull.
The dollar index stood at 81.320, after shuffling in
a slim 81.287-81.382 range on Monday. This followed a 0.2
percent fall on Friday - the biggest one-day decline in over
three weeks - after the payrolls report disappointed some dollar
In the absence of any major economic data and ahead of
policy reviews by central banks in Australia, Japan and Europe,
traders said it was not surprising to see financial markets take
on a more subdued tone.
The VIX volatility index eased back and U.S. equity
markets also calmed down after last week's selloff, with the S&P
500 index managing a higher close.
The euro was in familiar territory at $1.3421, having
drifted in a $1.3409-$1.3433 range on Monday. It remained just
off an eight-month trough of $1.3366 plumbed last week.
The yen was also pretty much in a holding pattern, with the
dollar buying 102.56 and the euro fetching 137.70
"We remain constructive on the U.S. dollar, and continue to
run long USD/JPY and short EUR/USD trades in our recommendations
portfolio," analysts at BNP Paribas wrote in a note to clients.
Possibly the best performing major currency was the
Australian dollar, though it eked out just a 0.2 percent gain on
The Aussie reached a session high of $0.9337,
pulling further away from a two-month trough of $0.9275 plumbed
Aussie bulls were probably betting on the fact that the
Reserve Bank of Australia (RBA) is more than likely to adhere to
its pledge to keep interest rates unchanged.
It has been exactly a year since the RBA last cut its cash
rate and there is nothing on the horizon to sway the bank from
changing its steady stance any time soon.
"An unchanged cash rate of 2.5 percent is odds on," said
David de Garis, senior economist at National Australia Bank in
"The market will be looking for signs of a cautious upgrade
to their view on the economy given improved consumer sentiment,
further signs of increased credit demand, especially for
business, and yesterday's more hopeful retailing conditions."
Surveys on the services sector in China, Europe and the
United States are also due later on Tuesday, although they tend
to provoke less market reaction than similar reports on
(Editing by Shri Navaratnam)