* U.S. unemployment data mixed, fails to stop dollar's move
* Offshore yuan on pace for largest 2-day rise since launch
* Dollar falls vs yen, euro
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh
(Updates to U.S. market open, adds quote, data, changes
dateline; previous LONDON)
By Dion Rabouin
NEW YORK, Jan 5 The dollar lost ground against
the yen and euro on Thursday after U.S. unemployment data failed
to reverse a downtrend that followed some of the biggest gains
on record for China's yuan.
A rise in overnight borrowing costs in Hong Kong and growth
in China's services sector to a 17-month high last month helped
put the yuan on pace for the biggest two-day rise for the
offshore version of its currency since its inception in 2010.
That in turn triggered a broader round of profit-taking on
the dollar, sending it more than 1 percent lower against the yen
and as low as $1.0575 per euro before a late-morning recovery in
U.S. jobless claims fell to a 43-year low last week, but
that data was countered by a soft report from payrolls processor
ADP showing employment gains were muted in December.
That put the dollar back on its lower trajectory after a
brief stall following the release of the jobless claims figure.
"All we're seeing is a continuation of the overnight move,
which is dollar weakness," said Chapdelaine Foreign Exchange
Managing Director Douglas Borthwick. "Obviously that's also
helped by the significant intervention by the Chinese overnight
in terms of where they're moving their overnight rates, pushing
dollar/yuan lower and a lower dollar/yuan means a lower dollar
Borthwick also said sentiment was growing among investors
that the dollar's strength has peaked as many return to markets
after the Christmas and New Year holidays.
The dollar was 1 percent lower against the yen, falling to
116.09 yen and edging toward its overnight low of 115.58 yen,
which was the lowest since Dec. 14.
The euro rose 0.5 percent against the dollar to $1.0533,
tracking toward its overnight high of $1.0575, the highest since
it peaked at nearly $1.07 on Dec. 30.
The dollar index, a measure of the greenback against
six world currencies, fell 0.6 percent to 102.320.
(Reporting by Dion Rabouin; Editing by Lisa Von Ahn)