The dollar headed for its first weekly loss against the yen in three weeks before a US payrolls report that may show the economy lost jobs every month in 2008 and the unemployment rate rose to a 16-year high.
The euro was set for a second weekly decline versus the British pound and the greenback as traders predict the European Central Bank will cut interest rates on January 15th to the lowest level since 2005.
At 8am the euro was trading at 89 pence, down from highs of over 98 pence reached at the end of December.
South Korea’s won fell, reversing gains, after the central bank reduced borrowing costs to a record low and said the economy is “deteriorating rapidly.”
“There’s a high likelihood that the jobs data will be very bad,” said Yuji Saito, head of the foreign-exchange group in Tokyo at Societe General SA, France’s second-largest bank by market value. “It’s a reason to sell the dollar.”
The dollar traded at 91.17 yen as of 8am in London, versus 91.83 at the end of last week. It touched 90.85 yesterday, the lowest since January 2nd.
The US currency strengthened to $1.3672 per euro from $1.3702, poised for a 1.7 per cent weekly gain. The dollar may drop to 90 yen and $1.3800 per euro today, Saito said.
Bloomberg