FOREX-Dollar, yen hold gains as job losses cloud outlook

Fri Jul 3, 2009 2:00am BST
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* Dollar holds ground made on bleak U.S. jobless numbers

* U.S. on holiday, volumes likely to be light

* Yen also keeps gains after investors take risk off table

TOKYO, July 3 (Reuters) - The dollar held gains made in the wake of bleaker-than-expected U.S. jobs numbers, hovering near its highest levels in a week against the euro on Friday and pressuring commodity currencies such as the Australian dollar.

U.S. Treasury bonds rose and stocks fell more than 2 percent after a government report showed U.S. employers cut 467,000 jobs in June, far more than expected, while the unemployment rate rose to 9.5 percent. [ID:nN01210643]

The data underscored the likelihood that recovery from recession would be long and slow, reducing the attraction of currencies such as the Australian dollar which have rallied this year along with stock markets on optimism about a turnaround.

"Worries that the global economy may not recover so quickly have been lingering but they were subdued as so many people had supported the 'green shoots' theory," said Hideki Amikura, deputy general manager of forex trading at Nomura Trust and Banking.

"But the U.S. jobs data damaged such economic optimism, prompting investors to buy back the yen and the dollar in risk aversion."

The euro fell 0.3 percent to $1.3960 EUR= in early Asian trade, after shedding more than 1 percent on Thursday and beating a retreat from this week's one-month high above $1.4200.  Continued...

 
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