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FOREX-Dollar edges down but close to highs, sterling awaits BOE update

Published 06/08/2015, 03:10 pm
Updated 06/08/2015, 03:16 pm
© Reuters. FOREX-Dollar edges down but close to highs, sterling awaits BOE update
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* Dollar inches lower against a basket of currencies

* Upbeat services report keeps September Fed hike in view

* Investors await Friday's U.S. jobs report

* Aussie slips after mixed employment signals

By Lisa Twaronite and Ian Chua

TOKYO/SYDNEY, Aug 6 (Reuters) - The dollar inched lower against a basket of currencies while staying near a more than three-month high on Thursday, after U.S. data provided more evidence that the U.S. Federal Reserve could hike interest rates as early as next month.

The dollar index .DXY= , which tracks the greenback against a basket of six major rivals, was down about 0.2 percent on the day at 97.799, but remained in sight of the previous session's high of 98.218, its strongest level since April 23.

The dollar was a few ticks lower against the yen at 124.790 yen JPY= after briefly popping above 125.000 on Wednesday for the first time since early June. It also hit a fresh six-year high on the New Zealand dollar, which skidded as low as $0.6490 NZD=D4 on Wednesday, but had last recovered to $0.6538.

The dollar's losses were expected to be capped ahead of key U.S. nonfarm payrolls data on Friday. Economists polled by Reuters are looking for total U.S. employment to have grown by 223,000 jobs in July, matching June's figure. The unemployment rate was forecast to hold for a second month at 5.3 percent, the lowest since April 2008.

"Overall, I think people want to keep their long dollar positions ahead of the payrolls report, expecting higher numbers," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

Dollar bulls took heart after the Institute for Supply Management's services sector index jumped to 60.3 last month, the highest reading since August 2005.

The upbeat report helped offset a slowdown in U.S. private job growth and comments from Fed Governor Jerome Powell, who said central bank policymakers have not yet decided whether to raise interest rates next month, in contrast to more hawkish comments from Atlanta Fed President Dennis Lockhart.

"USD and U.S. yields seesawed on the mixed data, but emerged higher with the booming non-manufacturing ISM outweighing ADP private payrolls data," noted Sean Callow, senior currency strategist at Westpac Bank.

The dollar, though, failed to make much headway against the euro, which drifted up to $1.0909 EUR= , nearly flat on the day, from a two-week low of $1.0847.

Sterling also climbed out of Wednesday's two-week trough of $1.5526 GBP=D4 to buy $1.5619, up 0.1 percent, as investors bet that a "Super Thursday" of Bank of England publications would take it closer to its first increase in rates in nearly a decade.

The BOE will release a mass of information at 1100 GMT, combining several major policy announcements that were previously made separately, and Governor Mark Carney is due to hold a media conference.

The Australian dollar slipped about 0.3 percent to $0.7332, off this week's peak of $0.7428 hit on Tuesday.

Data on Thursday showed that Australia's unemployment rate rose to its highest in six months in July even as the number of jobs added shot up almost four times more than expected, a mixed picture that did little to clarify the outlook for another rate cut by the Reserve Bank of Australia. ID:nL3N10H0Y5

(Editing by Simon Cameron-Moore)

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