The dollar fell for the first time in five days against the yen as U.S. Treasuries halted a decline that had taken 10-year yields to the highest level in more than two years.
The U.S. currency declined against most of its 16 major peers, posting its biggest losses against the New Zealand dollar. Malaysia’s ringgit dropped as a report showed imports surged more than exports in July. The greenback was set for a second weekly gain versus the euro before a report analysts said will show U.S. employers added jobs in August at a faster pace than the prior month amid bets the Federal Reserve will start reducing stimulus this month.
“The market is taking some profits before the payrolls report,” said Neil Jones, the head of European hedge-fund sales at Mizuho Bank Ltd. in London. “The expectations are high and this is factored in. The risk consequently would be a weak number. The market is still bullish on dollar-yen, but positions are not large.”
The dollar fell 0.4 percent to 99.72 yen at 7 a.m. New York time, paring its weekly advance to 1.6 percent. It was little changed at $1.3106 per euro, having risen 0.9 percent since Aug. 30. Europe’s 17-nation currency dropped 0.5 percent to 130.70 yen. The kiwi rose 0.7 percent to 79.43 U.S. cents.
Ten-year Treasury yields fell three basis points, or 0.03 percentage point, to 2.97 percent after reaching 3.01 percent, the most since July 2011. The rate has climbed 18 basis points since Aug. 30.
U.S. Labor Department data today will show nonfarm payrolls rose by 180,000 in August, up from an increase of 162,000 in July, according to the median forecast of economists surveyed by Bloomberg News. The unemployment rate held at 7.4 percent, the lowest since December 2008, a separate survey forecasts.
Government figures yesterday showed jobless claims in the U.S. fell by 9,000 to 323,000 in the week ended Aug. 31, less than the lowest estimate of economists surveyed by Bloomberg.
“We seem to be seeing a consolidation in markets,” said Callum Henderson, the global head of currencies research at Standard Chartered Plc in Singapore. “The main hindrance to a further move, at least in the short term, is that the market is already substantially long dollar-yen.”
A long position is a bet that an asset’s value will rise.
Federal Reserve policy makers are debating whether the economy is strong enough to allow them to pare monthly purchases of $85 billion in Treasuries and mortgage debt, which tend to debase the dollar. A Bloomberg survey of economists taken Aug. 9-13 showed that 65 percent of them expected a reduction at the Fed’s meeting on Sept. 17-18.
“The dollar’s strength will continue,” said Kikuko Takeda, a senior analyst in London at the Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan’s biggest financial group by market value. “The Fed is not looking for positive data to support the case for tapering, but it will go ahead with the plan unless there is particularly bad news.”
The euro fell for a second day versus the yen after European Central Bank President Mario Draghi said yesterday that policy makers had discussed an interest-rate cut at a meeting this week.
Draghi said the ECB is “ready to act” as rising money-market rates threaten his drive to reassure investors that borrowing costs will stay low. He spoke after policy makers kept the benchmark rate at a record-low 0.5 percent.
“The euro has been under pressure on the back of ECB President Draghi sounding as dovish as he possibly could have in light of improved growth prospects,” Manuel Oliveri, a London-based foreign-exchange strategist at Credit Agricole Corporate & Investment Bank, wrote in a research note today.
The ringgit headed for a weekly loss against the dollar after a report showed Malaysia’s imports climbed 6.2 percent from a year earlier in July, compared with a 1.3 percent increase in June. The median estimate in a Bloomberg survey was for a 0.2 percent contraction.
Malaysia’s currency dropped 0.7 percent to 3.3290 per dollar, extending the week’s loss to 1.4 percent, according to data compiled by Bloomberg.
Australia’s dollar rose, extending a weekly advance versus the greenback, as the nation prepared for a general election tomorrow that polls suggest will see conservative opposition leader Tony Abbott oust Labor Prime Minister Kevin Rudd.
The Aussie gained 0.4 percent to 91.57 U.S. cents, headed for a 2.9 percent climb against the greenback this week.
The Norwegian krone advanced as a report showed industrial production expanded in July at a faster pace than in the prior month. The krone gained 0.4 percent to 8.0062 per euro.