By Kosaku Narioka
The dollar declined against the euro and other major currencies in Asia on Friday amid caution before the important U.S. jobs data, giving up some of the recent sharp gains following the surprise outcome of the U.S. presidential election in November.
The dollar also weakened against the euro as market participants braced themselves for the Italian referendum on Sunday for a constitutional change, proposed by Prime Minister Matteo Renzi. Concerns about political stability have weighed on the euro against the dollar in recent weeks.
The euro rose to $1.0683 as of 0500 GMT from $1.0662 late Thursday in New York, according to EBS. The dollar fell to 113.94 yen from Y114.10. The British pound rose to $1.2607 from $1.2591.
Over the past few weeks, the dollar has surged on increased prospects of U.S. President-elect Donald Trump's possible fiscal stimulus and stronger U.S. growth. Helped by recent gains in energy prices, inflationary pressure is also increasing around the world, possibly prompting some central banks to tighten policy to cool economic activities.
Market participants are likely using U.S. non-farm payrolls data to help project how often the Fed will likely raise rates next year. The market has almost fully factored in the increase later this month.
Speculation that the European Central Bank could soon signal a slowdown of its asset purchase program also helped the euro recover, traders said. It's unclear, however, if the ECB could dial back its stimulus efforts if political uncertainty increases in Europe. Italian Prime Minister Renzi has pledged to resign if theconstitutional change is rejected.
"These days you never know what is going to happen," said Kosuke Hanao, head of FX at HSBC in Tokyo. "Few are still willing to make bets."
Interbank Foreign Exchange Rates At 23:50 EST / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates Close High Low 12/31
USD/JPY Japan 113.90-91 114.09-10 -0.17 114.20 113.59 -5.32
EUR/USD Euro 1.0681-84 1.0660-63 +0.20 1.0691 1.0658 -1.64
GBP/USD U.K. 1.2604-06 1.2590-92 +0.11 1.2615 1.2571 -14.46
USD/CHF Switzerland 1.0098-102 1.0106-10 -0.08 1.0112 1.0093 +0.80
USD/CAD Canada 1.3307-12 1.3317-22 -0.08 1.3320 1.3287 -3.82
AUD/USD Australia 0.7410-14 0.7413-17 -0.04 0.7433 0.7408 +1.72
NZD/USD New Zealand 0.7092-98 0.7084-90 +0.110.7104 0.7085 +3.83
EUR/JPY Japan 121.65-69 121.62-66 +0.02 121.75 121.22 -6.97
Source: ICAP PLC
Write to Kosaku Narioka at email@example.com
(END) Dow Jones Newswires
December 02, 2016 01:05 ET (06:05 GMT)
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