* China data send Canadian, Aussie dollars lower
* Euro holding most of last week's gains vs dollar
* Ukraine tensions weighing
By Patrick Graham
LONDON, March 10 The Australian and Canadian
dollars lost as much as half a percent against their U.S.
counterpart on Monday as a plunge in exports from China
underlined the risks of more weakness in one of the economies
that drives world growth.
Friday's robust U.S. jobs data countered a drop-off in
expectations of more policy easing from the European Central
Bank to keep the yen, dollar and euro in tight ranges, with
another bearish batch of figures from Japan of limited impact.
Sterling was the other major mover in the European morning,
suffering from the shift in money market rates in the common
currency's favour after the ECB meeting. It slid to 83.35 pence,
its weakest in a month against the euro.
The Aussie had been on the way back up towards the
end of last week, boosted by signs of improvement in its own
economy. But like fellow commodity producer Canada, it
depends on China extending a decade of robust expansion.
More doubts are emerging on that front.
Latest numbers showed Chinese exports fell 18 percent
year-on-year in February, and authorities in Beijing continued a
campaign to halt any further appreciation of the yuan by setting
its daily guidance for the currency at the highest since
"The Chinese export numbers are the main driver this morning
- you can see that the Aussie and Canadian dollars are both
under pressure," said Alvin Tann, strategist with French bank
Societe Generale in London.
"The situation in Ukraine is back on people's minds and one
could already see the pressure on emerging markets on Friday
after (strong) U.S. non-farm payrolls."
The Aussie traded 0.4 percent lower in the European morning
at $0.9033 and 93.31 yen.
The euro was holding within sight of Friday's 2 1/2-year
high of 1.3915, reached after last week's ECB meeting, which
quashed hopes for now of more action to stimulate growth.
Dealers were divided on whether the single currency had the
strength to break through $1.40 though some noted the lack of a
reaction to concerns over its strength expressed by French
central banker Christian Noyer.
"Traders are underweight I think in the euro," said a senior
spot dealer at one London bank.
"Real money investors are also underweight so I think its
much more likely to go higher. It was noticeable that Noyer came
out this morning and had little real impact."
The euro traded roughly steady at $1.3872.
The dollar and the euro both recovered some earlier losses
against the yen to be broadly flat .
Japan posted a record current account deficit in January
and its fourth-quarter growth was revised down but the Bank of
Japan is expected to keep policy unchanged at a two-day meeting
that began on Monday.
Analysts cautioned against reading too much into the Chinese
trade figures, which may have been distorted by the Lunar New
Year holiday, but investors were taking no chances.
The Aussie's robust showing in the past month surprised many
who expected it to weaken on the back of poor Chinese numbers.
Citigroup analysts argued in a morning note that the Australian
economy and currency may be driven more by domestic developments
"While there is little doubt that a sustained downtrend in
Chinese imports would be negative for AUD, there looks to be
some cause for caution in overreacting to this weekend's data,"
"The relationship between AUD and Chinese economic data flow
has deteriorated in recent months, with AUD failing to
participate in the stabilization seen in data flow over the
second half of 2013."