* Euro, yen, franc profit from halt in stocks rally
* Aussie dollar, Swedish crown slide after weak jobs numbers
* Euro recovers from talk of negative deposit rate
* Focus on U.S. retail sales later in day
By Patrick Graham
LONDON, Feb 13 The dollar fell to a two-week low
against the euro and lost more than half a percent against other
major currencies, the latest sign of its failure to launch this
year which has disappointed many investors.
The Australian dollar, looking in better shape this month
after a 10 percent slide since October, dived almost 1 percent
after an unexpectedly weak domestic jobs report. Sweden's crown
also fell on the back of similarly soft data.
A strong dollar against its major currency peers was a
central bet for many banks at the start of this year, convinced
that a steady reduction in Federal Reserve bond-buying would
drive up dollar interest rates and draw in capital.
The failure of 10-year Treasury yields to get closer to 3
percent, however, has left many disappointed and the major
currency markets generally somewhat bereft of direction.
"Today's move looks mainly like a squeeze of some of those
positions put on yesterday," said Paul Robson, strategist with
RBS in London.
"Some people clearly thought they could jump on the comments
about ECB rates but (more falls for the euro) failed to
materialise so those positions have been squeezed out again."
One explanation for the generally flat performance is that a
sell-off in emerging markets, the other side of a shift in
global capital due to the Federal Reserve reining in monetary
stimulus, has benefited other currencies as much as the dollar.
"The dollar's safe haven status has been eroded and as
equities come off, the dollar index is also a bit lower," said
Peter Kinsella, strategist with Commerzbank in London.
The dollar index was down 0.4 percent at 80.494. It
fell 0.53 percent against both the yen and euro to 101.99 yen
and $1.3660 respectively.
Weekly U.S. jobless claims and January U.S retail sales data
due later on Thursday may offer further direction but Robson
said it looked increasingly likely that any broader move higher
for the U.S. currency will not now come until later in the year.
"If 10-year yields push to 3 percent then we may get a
move," he said. "But we think the Fed is still a long way from
actually tightening rates and that's why we were reticent about
going long against sterling for example at the start of the
year. That has been proved right."
Dealers saw support for the dollar around 101.90 yen and it
held above that level in the European morning. Some said there
were Japanese exporters orders to buy yen at 102.50-70 yen.
The Aussie was a big loser among major currencies in the
last quarter of 2013, hit by slowing growth in China and a
central bank campaign of rate cuts aimed at weakening the
currency and prodding the economy back into life.
That move had seemed to be nearing an end earlier in
February when the Reserve Bank dropped its easing bias and
scaled back its verbal campaign against the dollar.
The jobs data on Thursday, however, bucked expectations for
a net gain of 15,000 jobs in January, instead showing another
3,700 Australians out of work. Unemployment rose to 6.0 percent,
the highest since July 2003 and above forecasts.
The Aussie fell as much as 1.1 percent, before
recovering to trade at $0.8949.
UBS analyst Gareth Berry argued that, with the Fed halting
the flow of dollars that has propped up the Aussie over the past
year, the Australian currency would now feel more impact from
the two full percentage points cut off base rates since the end
"There was minimal currency reaction to the first 175 basis
points worth of rate cuts," he said. "Now the shoe is very much
on the other foot, as the market reaction to the soft employment
data overnight demonstrated. We look for the Aussie to drop
towards $0.86 over the next three months."