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FOREX-Dollar enjoys post-payrolls glow in quiet start to week

Published 08/02/2016, 10:01 am
Updated 08/02/2016, 10:10 am
© Reuters.  FOREX-Dollar enjoys post-payrolls glow in quiet start to week
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* Dollar holds on to Friday's gains

* Details encouraging despite miss in headline U.S. jobs numbers

* Much of Asia shut for the Lunar New Year holidays

By Ian Chua

SYDNEY, Feb 8 (Reuters) - The dollar held onto its post-payrolls gains early on Monday in a sluggish start to the week with the Lunar New Year holidays and the Super Bowl game all but guaranteeing a tepid session in Asia.

The dollar index was flat at 97.051 .DXY , having climbed 0.6 percent on Friday thanks to an upbeat non-farm payrolls report. the headline employment gain of 151,000 undershot expectations, details were encouraging including a 0.5 percent jump in average hourly earnings - the biggest gain in a year. The jobless rate dipped to an 8-year low of 4.9 percent.

"This provides further evidence of the nascent improvement in wages growth, with some solid increases coming through in the past six months," analysts at ANZ wrote in a note to clients.

"The evidence is increasingly pointing towards a more resilient consumer, with falling unemployment and rising wages. A continuation of these themes would likely help quell fears over U.S. growth prospects."

The euro traded at $1.1146 EUR= , having retreated from a three-month peak of $1.1250. Against the yen, the greenback rebounded to 116.920 JPY= , from a 2-1/2 week trough of 116.285.

The dollar still nursed a 3.6-percent slide on the yen last week, marking its biggest weekly drop since July 2009. It had been under broad pressure as the market moved to price out the risk of a hike in U.S. interest rates this year.

Worries about slowing global growth combined with a loss in U.S. economic momentum in the fourth quarter have convinced many investors that the next hike by the Federal Reserve will be a long time coming.

The upbeat jobs data might have breathed some life back into those Fed hike expectations, but markets will need a lot more convincing, traders said.

Friday's rebound in the greenback hit commodity currencies hard. The Australian dollar slid back below 71 U.S. cents AUD=D4 , well off last week's high of $0.7242.

There is no major economic data out of Asia on Monday. Most centres in the region will be shut on Monday and Tuesday for the Chinese New Year holidays. China will be closed all week.

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