* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
By David Henry and Ritvik Carvalho
NEW YORK/LONDON, Feb 3 (Reuters) - The dollar's rebound
slowed on Wednesday with the euro and Japanese yen holding near
widely watched levels as foreign exchange markets looked for
clues to their next move, possibly from the U.S. jobs report on
Friday.
The euro EUR=EBS hung just above a two-month low of $1.20
as the yen JPY=D3 spent a second day around 105.
The broader dollar index =USD was up 0.05% at 91.134 in
morning trading in New York after rising to a two-month high of
91.283 during the previous session.
The dollar is up 1.3% this year as investors look to a
widening disparity between the strength of the U.S. and European
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 the U.S. economic growth and
vaccination advantages versus the appetite for currency
diversification and investment risk that usually works against
the dollar, the strategists said.
The euro largely shrugged off 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 were currency markets moved by a U.S. report that hiring
by private employers rebounded more than expected in January.
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 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, defying the currency's historical
inverse directional relationship with stocks.
However, many analysts expect that correlation to reassert
itself as the year progresses and for the dollar to decline with
global growth 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 9:46AM (1446 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index =USD 91.1340 91.0960 +0.05% 1.281% +91.3080 +90.9880
Euro/Dollar EUR=EBS $1.2028 $1.2045 -0.14% -1.56% +$1.2050 +$1.2005
Dollar/Yen JPY=D3 104.9900 105.0900 -0.04% +1.70% +105.1000 +105.0000
Euro/Yen EURJPY= 126.27 126.40 -0.10% -0.51% +126.5200 +126.1500
Dollar/Swiss CHF=EBS 0.8989 0.8975 +0.15% +1.60% +0.9000 +0.8971
Sterling/Dollar GBP=D3 $1.3660 $1.3670 -0.07% -0.01% +$1.3683 +$1.3620
Dollar/Canadian CAD=D3 1.2792 1.2781 +0.09% +0.46% +1.2811 +1.2764
Aussie/Dollar AUD=D3 $0.7618 $0.7608 +0.14% -0.96% +$0.7626 +$0.7602
Euro/Swiss EURCHF= 1.0810 1.0806 +0.04% +0.03% +1.0818 +1.0796
Euro/Sterling EURGBP= 0.8803 0.8810 -0.08% -1.50% +0.8822 +0.8803
NZ NZD=D3 $0.7200 $0.7192 +0.14% +0.29% +$0.7225 +$0.7187
Dollar/Dollar
Dollar/Norway NOK=D3 8.5950 8.6050 -0.17% +0.03% +8.6330 +8.5850
Euro/Norway EURNOK= 10.3400 10.3600 -0.19% -1.21% +10.3775 +10.3327
Dollar/Sweden SEK= 8.4117 8.3955 +0.14% +2.63% +8.4390 +8.3860
Euro/Sweden EURSEK= 10.1190 10.1050 +0.14% +0.42% +10.1419 +10.1029
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