Wednesday, 02 September 2015 10:23
TOKYO: The dollar firmed against the euro and yen in Asia Wednesday as optimism grew over the health of the US economy.
But the resource-dependent Australian dollar hit six-year lows, with evidence mounting that Chinese growth is slowing.
The US unit was trading at 120.33 yen in Tokyo late morning trade, up from 119.51 yen in New York on Tuesday.
The euro fetched $ 1.1265 and 135.56 yen against $ 1.1313 and 135.20 yen.
US Jobs figures for August, to be announced on Friday, were widely expected to be positive, according to economists surveyed by Bloomberg, who estimated more than 200,000 jobs would have been created for the fourth straight month.
While unspectacular, that would add momentum to a tentative recovery in the world’s largest economy.
Investors are weighing the likelihood of a Federal Reserve increase in zero-level interest rates this month. The US central bank will determine the timing of its first rate hike since 2006 after looking at economic data.
“The US dollar should hold up given payrolls on Friday” Imre Speizer, a senior market strategist at Westpac Banking Corp. in Auckland, told Bloomberg News.
“There’s no reason to think that we will get a bad result and that should keep pricing for a Fed hike in place.”
Asian shares turned positive by lunch after major markets had opened lower.
But the over-arching narrative of recent months — slowing growth in China — remained in place after fresh data on Tuesday showed the country’s vast manufacturing sector was contracting.
China — which accounts for around 13 percent of global GDP — has been almost the sole bright spot in the worldwide economy since the financial crisis erupted in 2008.
Signs of weakening are sending shudders around the world, with economies heavily dependent on trade with resource-hungry Beijing taking a hit.
Australia, which on Wednesday announced an underwhelming 0.2 percent quarterly growth in GDP, is on the front line; its currency, which was on a par with the greenback two years ago, hit 69.82 US cents on Tuesday.
