MW : Dollar gains ground on yen as equities find footing
Risk appetite remains the dominant theme in otherwise choppy, range-bound currency markets, analysts said, with the Japanese unit bearing the brunt of the exit from perceived safe havens, analysts said.
The greenback bought 93.76 yen, up from 93.36 yen in late North American trading Thursday. The euro rose 0.3% to 134.69 yen.
The Japanese government on Friday said the nation's unemployment rate rose to 5.7% in July from 5.4% the previous month, the highest level since World War II and higher than the 5.5% expected by economists. See full story.
But analysts said pressure on the yen was more a function of rising risk appetite.
"Though unemployment in Japan hit a record high, the yen selling is more a factor of fairly positive performances in equity markets in the U.S. and Asia," wrote strategists at Brown Brothers Harriman.
Chinese shares extended their losing streak Friday, while Japanese shares were gainers in cautious trade ahead of Japan's lower house elections on Sunday. The poll is widely expected to bring the opposition Democratic Party of Japan to power. Read about the election.
European shares were higher and U.S. stock index futures extended gains. Read Indications.
Strategists at UniCredit MIB said major currency pairs are likely to continue to see swings until the release of the U.S. labor market report for August on Sept. 4, despite mostly positive macro-economic data. A public holiday in Britain on Monday should also make for position-squaring Friday.
U.S. economic data due out on Friday include July personal income and spending at 8:30 a.m. Eastern time and a consumer sentiment survey for August at 10 a.m. Eastern time.
The dollar index (DXY 77.96, -0.05, -0.07%) , which tracks the greenback against a trade-weighted basket of six major currencies, traded at 77.985, little changed from 78.00 late Thursday.
The euro traded at $1.4364 versus the dollar, barely changed from around $1.4365 in North American trade late Thursday.
The euro erased an earlier loss after the European Commission's economic sentiment gauge for the 16-nation euro zone posted a stronger-than-expected rise in August. The indicator rose to 80.6 from a reading of 76 in July. Economists had forecast a rise to 78.
The survey "shows further signs of improvement, in keeping with the message from other survey indicators, notably the [purchasing managers indexes]," said Kerri Maddock, an economist at Barclays Capital.
"Collectively, along with other data such as the German new orders, we continue to expect euro area GDP to grow by around 0.5% (quarter-on-quarter) in Q3, marking the end of recession," Maddock said. "That said, employment expectations continued to be very depressed across all sectors."
Sterling, which has been on the defensive this week, gained ground to trade at $1.6345, up from $1.6230. The euro slipped 0.3% against sterling to trade at 87.86 British pence.
