FOREX: Yen Weaker, But Off Vs Dollar
The dollar fell 0.62 percent to 1.2963 Swiss francs .
Sterling gained 0.78 percent to $1.8340 . The Australian
dollar gained 1.01 percent to US$0.7605 .
Traders said they did not see any dollar-buying
intervention operations by the Bank of Japan in the yen's sharp
downward move on Tuesday. Sharp falls in the Japanese currency
have typically been the result of Tokyo's program to prevent
yen strength from jeopardizing Japan's export-led recovery.
After a surprisingly robust U.S. payrolls report last
Friday, dollar bulls had further supportive news on Tuesday
when data from outplacement firm Challenger, Gray & Christmas
Inc. showed that lay-offs in the United States fell in March to
the lowest level in nine months, although companies remain
hesitant to hire new people.
"That's certainly part of the backdrop since Friday," said
Daniel Katzive, foreign exchange strategist at UBS in Stamford,
Connecticut, noting that the market showed little interest in
the Challenger report.
"The market is still absorbing the implications for U.S.
monetary policy," he said.
Signs of a long-awaited recovery in the U.S. jobs market
fueled expectations the Fed could raise interest rates from a
46-year low of 1 percent sooner than expected, boosting the
appeal of dollar-denominated assets for foreign investors.
U.S. interest rate futures have priced in a Fed rate hike
St. Louis Federal Reserve President William Poole, a voting
member of the Federal Open Market Committee, was to speak at
1:30 p.m. EDT (1730 GMT) on "Inflation signals and inflation
noises." His comments were likely to be closely scrutinized for
clues on when the Fed might make a move on rates.
Dealers continued to keep an eye on the situation in Iraq,
where there were reports of further bloodshed, but noted the
dollar had become more resilient to violence in the region.
"The situation is now regarded more as a local conflict,
which means it is having less impact on the currency market,"
said Hans Redeker, chief foreign exchange strategist at BNP
On Tuesday, senior al Qaeda operative Abu Musab al-Zarqawi
pledged to carry out more attacks on U.S. troops in Iraq,
according to an audio tap aired on an Islamist Web site.
(Additional reporting by Christina Fincher in London)
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