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Dollar rangebound ahead of China surveys, US jobs report

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Major currencies remained in familiar ranges on Thursday as caution prevailed ahead of surveys on Chinese manufacturing activity later in the session and key US jobs data on Friday.

[TOKYO] Major currencies remained in familiar ranges on Thursday as caution prevailed ahead of surveys on Chinese manufacturing activity later in the session and key US jobs data on Friday.

The euro remained under pressure after a downbeat eurozone inflation report, while the yen firmed slightly in early Asian after the Bank of Japan's tankan corporate sentiment survey contained both positive and worrying signs.

Confidence at big Japanese manufacturers worsened, leading some to bet that the central bank could take further stimulus steps, but service-sector sentiment improved for fourth straight quarters to hit the highest level in more than two decades, the closely watched central bank survey showed.

The dollar was buying 119.86 yen, down slightly from late US trading but well below last week's high of 121.24. The euro slipped about 0.1 per cent to 133.90 yen.

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China's official China Purchasing Managers' Index (PMI) for September will be released, in addition to the private Caixin/Markit final PMI figure. The preliminary, or "flash" number, of 47.0 indicated a contraction in factory activity to 6-1/2 year lows.

China will also begin its one-week string of National Day holidays on Thursday. "With the world so sensitive to China's growth prospects, today's manufacturing and services reports could drive sentiment," Chris Weston, chief market strategist at IG Ltd in Melbourne, said in a note to clients.

The US Federal Reserve opted to refrain from raising interest rates for the first time since 2006 at its meeting last month, citing worries about the global economy, particularly China. But an improving US employment situation could prompt the central bank to hike as early as this month.

Economists expect Friday's US nonfarm payrolls report to show that employers added 203,000 jobs in September, according to a Reuters poll.

The latest ADP data released overnight supported these expectations, showing US private-sector employers added 200,000 jobs.

Against the dollar, the euro shed about 0.1 per cent to US$1.1171.

Eurozone prices fell by 0.1 per cent on an annual basis in September, falling short of expectations and well below the European Central Bank's target of just under 2 per cent. That raised expectations that the ECB might decided to take further easing measures.

REUTERS

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