* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By David Henry
NEW YORK, Feb 3 (Reuters) - The dollar's rebound slowed on Wednesday with
the euro and Japanese yen holding near widely watched levels as markets looked
for clues to their next move, possibly from the U.S. jobs report on Friday.
The euro EUR=EBS hovered just above a two-month low of $1.20 as the yen
JPY=D3 spent a second day trading near 105.
The broader dollar index =USD was up 0.07% at 91.145 in afternoon trading
in New York after rising to a two-month high of 91.308 during the session.
The dollar is up 1.3% this year as investors see a widening disparity
between the likely strength of the U.S. and European post-pandemic recoveries.
"The dollar bounce has slowed but may not be over," strategists at Brown
Brothers Harriman wrote on Wednesday.
The battle seems be between perceived U.S. advantages on economic growth and
vaccination and an appetite for currency diversification and investment risk,
the strategists said.
The euro barely moved on news that former European Central Bank chief Mario
Draghi had accepted a request to try to form a new Italian government, even as
European bond and stock markets cheered. Nor did currency markets move on U.S. reports that hiring by private
employers rebounded more than expected in January, and that service sector
activity was better than expected and reached its highest level in nearly two
years. The ADP National Employment Report showed private payrolls increased by
174,000 jobs in the month, when economists were expecting an additional 49,000.
Though the ADP report has a spotty record predicting the private payrolls
count in the U.S. government's employment report because of methodology
differences, it is still watched for clues on the labor market's health.
Economists expect the closely watched government report due on Friday to
show that U.S. nonfarm payrolls increased by 50,000 jobs in January.
The dollar's advances have come despite a rally in equities and improving
risk sentiment - a reversal of the traditional pattern.
However, many analysts expect that pattern to reassert itself as the year
progresses, and see the dollar declining as global growth is supported by
massive fiscal stimulus and ultra-easy monetary policies, which could kindle
inflation.
The yen has been steady against the dollar after the greenback benefited
from a long and massive bout of short-covering.
"It's been a nice run for the yen in terms of strength, but I think there's
maybe some tiring of that move and some retracement," said Bart Wakabayashi,
Tokyo branch manager of State Street Bank and Trust.
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Currency bid prices at 3:01PM (2001 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 91.1450 91.0960 +0.07% 1.294% +91.3080 +90.9880
Euro/Dollar EUR=EBS $1.2026 $1.2045 -0.15% -1.57% +$1.2050 +$1.2004
Dollar/Yen JPY=D3 105.0400 105.0900 -0.02% +1.72% +105.1000 +105.0000
Euro/Yen EURJPY= 126.31 126.40 -0.07% -0.48% +126.5200 +126.1500
Dollar/Swiss CHF=EBS 0.8992 0.8975 +0.19% +1.64% +0.9002 +0.8971
Sterling/Dollar GBP=D3 $1.3642 $1.3670 -0.20% -0.14% +$1.3683 +$1.3620
Dollar/Canadian CAD=D3 1.2778 1.2781 -0.02% +0.35% +1.2811 +1.2764
Aussie/Dollar AUD=D3 $0.7621 $0.7608 +0.18% -0.92% +$0.7626 +$0.7602
Euro/Swiss EURCHF= 1.0813 1.0806 +0.06% +0.06% +1.0818 +1.0796
Euro/Sterling EURGBP= 0.8812 0.8810 +0.02% -1.40% +0.8822 +0.8798
NZ NZD=D3 $0.7200 $0.7192 +0.13% +0.28% +$0.7225 +$0.7185
Dollar/Dollar
Dollar/Norway NOK=D3 8.5895 8.6050 -0.01% +0.20% +8.6330 +8.5850
Euro/Norway EURNOK= 10.3280 10.3600 -0.31% -1.31% +10.3775 +10.3225
Dollar/Sweden SEK= 8.4137 8.3955 +0.14% +2.65% +8.4390 +8.3860
Euro/Sweden EURSEK= 10.1187 10.1050 +0.14% +0.42% +10.1419 +10.1029
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