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FOREX-Dollar dips after disappointing U.S. jobs data

Published 03/07/2015, 10:44 am
© Reuters.  FOREX-Dollar dips after disappointing U.S. jobs data

* Downbeat jobs data gives investors no reason to cheer

* Investors cautious ahead of Greece's referendum on Sunday

* U.S. markets closed for Independence Day on Friday

By Lisa Twaronite

TOKYO, July 3 (Reuters) - The dollar slipped in early Asian trading on Friday, as disappointing U.S. employment data and caution ahead of Greece's referendum on bailout conditions kept the market mood subdued.

Against its Japanese counterpart, the dollar was buying 122.84 yen JPY= , down about 0.2 percent on the day but holding well above a five-week low of 121.93 hit on Tuesday.

The euro edged down about 0.1 percent to 136.31 yen EURJPY= , while gaining about 0.1 percent against its U.S. counterpart to $1.1096 EUR= .

U.S. markets will be closed on Friday in observance of Independence Day.

Investors had been hoping that solid improvement in the labour market would reinforce expectations that the U.S. Federal Reserve will raise interest rates as early as September, but payrolls data was not as robust as many expected.

Employers hired 223,000 workers last month, fewer than the 230,000 increase forecast by economists polled by Reuters. The government also downgraded its reading on April and May job growth. ID:nL1N0ZI1JF

While the downbeat report gave investors little to cheer about, it was not gloomy enough to compel them to tweak their expectations for the timing of the Fed's tightening.

"We do not think that the report will significantly shift opinion within the Fed about timing of the first rate hike, which we continue to expect in September," strategists at Barclays wrote in a note.

Caution also reigned ahead of Greece's Sunday referendum on an international bailout deal that could ultimately determine whether it stays or not in the euro zone.

The International Monetary Fund warned on Thursday that Greece would need an extension of its European Union loans and a potentially a large debt writeoff if it cannot implement economic reforms and its growth slows. ID:nL1N0ZI18A

"Investors will probably look to JPY as a risk-hedge going into the referendum," Steven Englander, global head of G10 FX strategy at Citi, said in a note to clients. (Editing by Richard Borsuk)

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