June 4 2007, 04:29 GMT

Forex - US dollar mixed Sydney afternoon; support from US data

Mon, Jun 4 2007, 04:29 GMT

http://www.afxnews.com/
SYDNEY (XFN-ASIA) - The US dollar was trading mixed against major currencies in a narrow range but was well-supported following data on Friday reinforcing the Federal Reserve's view that the economy continuing to recover despite the US housing downturn, dealers said.
They said the dollar is maintaining a firm tone helped by a rise in US bond yields although slipping slightly against the euro ahead of an expected rate hike by the European Central Bank (ECB) on Wednesday.
At 2:00 pm Sydney, (0400 GMT) the dollar was at 121.99 yen from 121.05 in mid morning trade here while the euro was at 1.3447 usd from 1.3445.
ANZ Banking Group senior currency strategist Tony Morriss said trading is relatively quiet with major currencies consolidating after Friday's movements which saw the dollar gain following stronger-than-expected May US jobs data.
The dollar's gains were capped by data on Friday showing inflation measured by the core personal consumption expenditure (PCE) to be tamer than expected in April.
The US non-farm payrolls report showed 157,000 jobs gained in May against a market consensus forecast increase of 140,000 increase while the April PCE was up 2.0 pct year-on-year versus a consensus forecast rise of 2.1 pct.
Morriss said the US dollar has failed to break through the 122.0 yen barrier but is finding support close to this level.
"It is not coming down anytime soon - I think it is finding support from higher US bond yields but the euro is also finding support above the 1.3400 usd level ahead of the ECB's expected rate move this week," he said.
Morriss said significant price action is not expected until European and US markets reopen after the weekend.
The ECB is widely expected to raise official rates by 25 basis points to 4.00 pct on Wednesday while the Bank of England is tipped to announce interest rates will remain at 5.5 pct while indicating an upside risk to interest rates ahead.
Morriss said the Australian dollar has moved lower after last week's strong gains on the back of merger and acquisition flows.
"I think there's a feeling it (the Australian dollar) went a little bit too far last week and also the interest rate differential seems to have moved a little bit more in the US dollar's favor," he said.
Sydney 2.00 pm (0400 GMT) vs 9.55 am

US dollar
yen 121.99 vs 122.05
sfr 1.2294 vs 1.2297

Euro
usd 1.3447 vs 1.3445
yen 164.03 vs 164.06
sfr 1.6530 vs 1.6532
stg 0.6784 vs 0.6782

Sterling
usd 1.9834 vs 1.9825
yen 241.94 vs 241.91
sfr 2.4380 vs 2.4377

Australian dollar
aud 0.8323 vs 0.8324
stg 0.4196 vs 0.4198
yen 101.53 101.57

New Zealand dollar
usd 0.7450 vs 0.7444