* U.S. dollar helped by trade data
* Canadian dollar at lowest in almost 4 years
* Focus on U.S. jobs data on Friday
By Patrick Graham
LONDON, Jan 8 The dollar consolidated gains
against the yen on Wednesday after a boost from upbeat trade
data a day earlier which triggered renewed appetite for riskier
assets among global investors.
Action in European trade centred around the Swedish crown,
hurt by minutes from the central bank's last meeting that were
read as leaving room for more cuts in interest
The Canadian dollar also weakened. Hedge funds have been
betting against it and despite regaining a foothold as North
American investors began to come online it was still down almost
half a percent on the day, 1.5 percent since late last week.
Dealers said trade was slowing somewhat ahead of the
publishing of minutes from the last meeting of the U.S. Federal
Reserve later on Wednesday, keenly eyed for more signs of how
long the central bank will keep interest rates at record lows.
Friday's U.S. jobs report, however, may provide more clues
as to how quickly the U.S central bank will cut back on its huge
bond-buying programme this year.
"We think there may be some more room for the dollar to rise
tonight after the minutes," said Michael Sneyd, currency
strategist with BNP Paribas in London.
"Beyond that we are looking for an inflationary number on
payrolls which should support the Fed plan for tapering (of
monetary stimulus) ... and a stronger dollar."
He said BNP has a forecast of 215,000 new jobs created by
the world's biggest economy in December - above the 196,000
consensus of economists in a Reuters poll.
The dollar rose 0.2 percent to 104.80 yen, pulling
away from Monday's two-week low of 103.88 and back towards last
week's five-year high of 105.45 yen. It had peaked earlier on
Wednesday at 105.135.
Against a basket of currencies, the dollar reached a
six-week high of 81.048 and was last up 0.2 percent on the day
The dollar was last up 0.2 percent against the euro at
Data on Tuesday showing the smallest U.S. trade deficit in
four years as exports hit a record high, lifted the dollar. At
the same time, global stocks rose, indicating the greater risk
appetite that is usually a sign to sell the yen.
However, European stock markets fell back after early gains
and were looking to the U.S. releases for more direction.
The Swedish central bank's emphasis on macroprudential
measures to deal with the effects of household debt was read as
leaving the door open to another cut in interest rates. Minutes
from the bank's last meeting also showed that two members
supported a bigger cut in rates last month. The market response
was to knock around 0.3 percent off the crown.
BNP's Sneyd said he had expected the minutes to head off the
prospect of another hike and the lack of such as message had
hurt the crown.
"Markets had expected the door would be closed," he said.
"Overall these minutes looked very dovish. They look very
sensitive to any downside risk (on the economy)."
The Canadian dollar took the biggest hit after a survey of
purchasing managers came in lower than expected and the trade
deficit proved bigger than forecast.
That lifted the U.S. dollar to C$1.0825 <CAD=D4, its highest
since May 2010. It was last up 0.4 percent at C$1.0807.
Comments by Bank of Canada chief Stephen Poloz that it
should keep its key interest rate on hold until data persuaded
it otherwise also weighed on the currency.