Friday, 03 July 2015 11:50
TOKYO: The dollar was under pressure Friday following a mixed US jobs report that has investors questioning the likelihood of a September interest rate hike, while the euro was little changed ahead of this weekend’s Greek bailout referendum.
In Tokyo, the greenback bought 123.13 yen, marginally up from 123.07 yen in New York but down from 123.54 yen earlier Thursday in Asia.
The euro held up at $ 1.1091 and 136.56 yen from $ 1.1086 and 136.43 yen.
On Thursday, the US Labor Department said the world’s top economy added a solid 223,000 jobs in June but hourly earnings were flat compared with May. It also cut the estimates for job growth in April and May.
A strong reading would have lifted expectations that the Federal Reserve will hike interest rates soon.
“This data doesn’t indicate the market is just going to pile into the dollar… It just leads to more consolidation at current levels,” Lennon Sweeting, a dealer at USForex Inc., told Bloomberg News.
But Ernie Cecilia, chief investment officer at US-based Bryn Mawr Trust, said the employment figures will do little to change the odds of a Fed rate rise this year, which is a plus for the dollar.
“The Fed is going to raise rates in the second half of this year and I do think the dollar will stay relatively strong,” he said.
Greeks go to the polls Sunday to decide whether or not to accept its creditors’ bailout proposals, a vote European leaders have warned is effectively a referendum on whether or not to stay in the eurozone.
Prime Minister Alexis Tsipras broke off debt reform talks last week and called the plebiscite — leading it to default on a loan repayment Tuesday.
“Knee-jerk market reaction to a ‘yes’ should be both risk and euro positive,” Ray Attrill, National Australia Bank’s global co-head of forex strategy, said in a commentary.
“In the event of a ‘no’ markets will – rightly in our view – jump to the conclusion that a Greek exit from the eurozone shifts from possible to probable, and that a severing of the lifeline from the (European Central Bank) to the Greek banking system will be the mechanism that sets this process off.”
The dollar was mostly weaker against other Asia-Pacific currencies.
It eased to 13,306 Indonesian rupiah from 13,352 rupiah on Thursday, to Sg$ 1.3499 from Sg$ 1.3516, to 45.11 Philippine pesos from 45.19 pesos, and to 1,120.83 Korean won from 1,123.18 won.
The greenback also fell to Tw$ 30.88 from Tw$ 30.91 and to 63.37 Indian rupees from 63.60 rupees while it was unchanged at 33.78 Thai baht.
The Australian dollar weakened to 75.84 US cents from 76.47 cents after the country reported weaker-than-expected retail sales data, while the Chinese yuan slipped to 19.82 yen from 19.87 yen.
