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US dollar slips ahead of jobs data, BoE meet in focus

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The US dollar was under pressure Thursday as upbeat jobs data did little to boost hopes for a US interest rate rise, while traders also eyed a Bank of England meeting.

[TOKYO] The US dollar was under pressure Thursday as upbeat jobs data did little to boost hopes for a US interest rate rise, while traders also eyed a Bank of England meeting.

On Wednesday, a report from private US payroll firm ADP said the world's top economy added 179,000 jobs in July, slightly more than expected.

The figures came ahead of official job-creation figures for July, due on Friday.

But analysts expect only a moderate impact on the chances of a US rate hike this year - a plus for the dollar - even if the figures are strong.

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A sluggish second-quarter US GDP report, which showed the economy expanded by just 1.2 per cent, was well below the pace of the last two years.

"A solid July nonfarm payrolls report, with strong job gains and wage growth, will support a modest upward revision to US interest-rate expectations in favour of the dollar," Elias Haddad, a senior currency strategist at Commonwealth bank of Australia, told Bloomberg News.

In Tokyo, the greenback weakened to 101.22 yen from 101.25 yen Wednesday in New York.

The US unit also traded in the red against Malaysia's ringgit, the South Korean won, Philippine peso, the Singapore dollar, and Thai baht.

The euro was nearly flat at US$1.1144 from US$1.1148 while it dropped to 112.82 yen from 112.87 yen in US trade.

The pound rose to US$1.3332 from US$1.3316 in US trade, as the BoE wraps up a policy meeting later Thursday.

Britain's central bank is seen as likely to cut interest rates to a record-low 0.25 per cent - their lowest in the BoE's more than 300-year history - as it looks to counter the impact of the country's vote to quit the European Union.

A rate cut would be a first since March 2009, when the BoE slashed to the current all-time low of 0.50 per cent - and launched its bond-buying programme as a buffer against the fallout from the global financial crisis.

AFP

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