May 3, 2018 / 2:25 PM / in 19 days

FOREX-Dollar declines from 2018 highs before jobs report

    * Dollar choppy before Friday's jobs report
    * Profit-taking seen halting dollar rally

 (Updates prices, market activity and comments to U.S. market
open, new byline, changes dateline, previous LONDON)
    By Karen Brettell
    NEW YORK, May 3 (Reuters) - The U.S. dollar was little
changed in choppy trading on Thursday as investors took profits
from a rally that sent the greenback  to its highest levels of
the year and awaited Friday’s payrolls data for April.
    The dollar has erased all its 2018 losses in the past two
weeks on expectations the Federal Reserve will continue to raise
interest rates while other central banks, including the European
Central Bank, take longer to reduce stimulus.
    Further dollar gains will likely depend on data showing
additional improvement in growth and inflation, which could
compel the U.S. central bank to raise rates this year an
additional three times.
    “We are coming at key support points for the euro/dollar and
pound/dollar and the market wants to see more positive U.S. data
before it takes the dollar higher,” said Boris Schlossberg,
managing director of FX strategy at BK Asset Management in New
York.
    The dollar index was up 0.02 percent at 92.522, below
Wednesday's 2018 high of 92.834. 
    New orders for U.S.-made goods rose more than expected in
March, boosted by strong demand for transportation equipment and
a range of other products, but there are signs that business
spending on equipment is slowing, data showed on Thursday.
    The U.S. trade deficit, meanwhile, narrowed sharply in March
as exports increased to a record high amid a surge in deliveries
of commercial aircraft and soybeans, bolstering the economy's
outlook heading into the second quarter.
    Friday’s employment report for April will be evaluated for
further indications of the strength of the U.S. labor market and
inflation pressures.
    The Fed on Wednesday held interest rates steady and
expressed confidence that a recent rise in inflation to near the
central bank's target would be sustained, leaving it on track to
raise borrowing costs in June.
    Some analysts interpreted its comments on inflation as a
signal it may allow price rises beyond its target, a stance that
would limit the need for it to embark on a more aggressive path
of tightening.
    Comments from the Fed were "possibly disappointing for
dollar bulls," but the main reason for the euro's resilience on
Thursday was profit-taking after the dollar's rapid move higher,
said Jane Foley, currencies strategist at Rabobank.
    Euro zone inflation slowed to 1.2 percent year-on-year in
April, down from 1.3 percent in March, and core inflation fell
even more, raising questions about the ECB's plan for
withdrawing its monetary stimulus.
    
========================================================
    Currency bid prices at 10:13AM (1413 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1969        $1.1950     +0.16%         +0.00%      +1.2008     +1.1947
 Dollar/Yen       JPY=        109.2800       109.8300    -0.50%         +0.00%      +109.8700   +109.1600
 Euro/Yen         EURJPY=     130.81         131.29      -0.37%         +0.00%      +131.6500   +130.8200
 Dollar/Swiss     CHF=        0.9990         0.9991      -0.01%         +0.00%      +0.9996     +0.9957
 Sterling/Dollar  GBP=        1.3569         1.3576      -0.05%         +0.00%      +1.3629     +1.3569
 Dollar/Canadian  CAD=        1.2858         1.2882      -0.19%         +0.00%      +1.2886     +1.2816
 Australian/Doll  AUD=        0.7521         0.7494      +0.36%         +0.00%      +0.7542     +0.7486
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1960         1.1940      +0.17%         +0.00%      +1.1966     +1.1939
 Euro/Sterling    EURGBP=     0.8820         0.8800      +0.23%         +0.00%      +0.8830     +0.8800
 NZ Dollar/Dolar  NZD=        0.7034         0.6994      +0.57%         +0.00%      +0.7044     +0.6992
 Dollar/Norway    NOK=        8.0654         8.1199      -0.67%         +0.00%      +8.1229     +8.0380
 Euro/Norway      EURNOK=     9.6555         9.7059      -0.52%         +0.00%      +9.7169     +9.6391
 Dollar/Sweden    SEK=        8.8493         8.9148      -0.55%         +0.00%      +8.9181     +8.8345
 Euro/Sweden      EURSEK=     10.5967        10.6556     -0.55%         +0.00%      +10.6900    +10.5827
    
    

 (Additional reporting by Tommy Wilkes in London; Editing by Dan
Grebler)
  
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