* Dollar index nudged off two-week highs
* Global bond yields fall on dovish central banks
* U.S. private-sector jobs data was lower than expected
* U.S. jobless claims fall, trade gap widens
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds new comment, U.S. services sector data, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 3 (Reuters) - The dollar slipped to a
one-week low against the Japanese yen on Wednesday, weighed down
by declining U.S. Treasury bond yields, fading optimism over the
China-U.S. trade deal, and the possibility of fresh tariff
hostilities with Europe.
Volume was light ahead of the U.S. Independence Day holiday
on Thursday. Investors, though, are looking to Friday's U.S.
nonfarm payrolls for June, with markets forecasting new jobs of
160,000.
U.S. economic reports on Wednesday were mixed and did not
really change the dollar's trading direction.
Data from payrolls processor ADP showed U.S. companies added
102,000 private-sector jobs in June, much higher than the
revised 41,000 jobs in May, but lower than the 140,000 analysts
had forecast. Paul Ashworth, chief U.S. economist at Capital Economics,
said the ADP report suggests the deterioration in the broader
economy has spread to the labor market.
"Even with the U.S.-China trade talks back on track, for now
at least, the evidence of a slowdown in employment growth should
still be enough to persuade the Federal Reserve to cut rates in
either July or September, but expectations of a 50 basis-point
cut seem misplaced," he added.
Wednesday's data also showed U.S. weekly jobless claims fell
more than expected to a seasonally adjusted 221,000, while the
U.S. trade deficit in May widened to $55.5 billion from April's
revised $51.2 billion. Numbers on the U.S. service sector were also downbeat, with
the Institute for Supply Management's non-manufacturing index
falling to 55.1 in June from 56.9 in May. In afternoon trading, the dollar dipped 0.1% against the yen
to 107.82, after earlier falling to a one-week low of 107.54
JPY= .
The dollar-yen pair has become more sensitive to trade
developments, with investors having grown more skeptical about
the possibility of a speedy resolution to the trade war.
Against a basket of six currencies, the dollar eased from
Tuesday's two-week highs .DXY to trade little changed on
Wednesday at 96.765. The index earlier fell as bond yields
extended the previous day's decline, with 10-year yields hitting
2-1/2-year lows below 1.94% US10YT=RR .
WEAK DOLLAR
Expectations have grown that the Fed will embark on its
first rate cut in a decade at a policy meeting this month.
Markets are assigning a more than a 70% probability of a quarter
point rate cut at the next policy meeting.
"We continue to like the broad U.S. dollar lower," said Mark
McCormick, global head of FX strategy at TD Securities in
Toronto. "It's telling of the anti-U.S. dollar view that the
last month has seen the yen rally alongside higher-yield
emerging market currencies."
The euro, meanwhile, was little changed at $1.1283 EUR=
following a volatile session on Tuesday.
The common currency briefly got a lift on Tuesday after a
media report that the European Central Bank was in no rush to
cut rates at the July meeting. But it later slipped after IMF
Managing Director Christine Lagarde, perceived as a policy dove,
was nominated as the next ECB president.
========================================================
Currency bid prices at 1:18 PM (1718 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1281 $1.1283 -0.02% -1.64% +1.1310 +1.1269
Dollar/Yen JPY= 107.8200 107.8800 -0.06% -2.21% +107.9200 +107.5400
Euro/Yen EURJPY= 121.64 121.74 -0.08% -3.63% +121.8300 +121.3200
Dollar/Swiss CHF= 0.9864 0.9861 +0.03% +0.51% +0.9872 +0.9836
Sterling/Dollar GBP= 1.2571 1.2591 -0.16% -1.46% +1.2601 +1.2558
Dollar/Canadian CAD= 1.3067 1.3104 -0.28% -4.18% +1.3119 +1.3064
Australian/Doll AUD= 0.7036 0.6994 +0.60% -0.18% +0.7039 +0.6986
ar
Euro/Swiss EURCHF= 1.1128 1.1128 +0.00% -1.12% +1.1136 +1.1109
Euro/Sterling EURGBP= 0.8972 0.8959 +0.15% -0.13% +0.8990 +0.8960
NZ NZD= 0.6706 0.6671 +0.52% -0.16% +0.6719 +0.6671
Dollar/Dollar
Dollar/Norway NOK= 8.5342 8.5646 -0.35% -1.21% +8.5949 +8.5322
Euro/Norway EURNOK= 9.6260 9.6668 -0.42% -2.83% +9.6901 +9.6254
Dollar/Sweden SEK= 9.3067 9.3278 -0.28% +3.83% +9.3636 +9.2882
Euro/Sweden EURSEK= 10.5011 10.5302 -0.28% +2.31% +10.5565 +10.4890
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