FOREX MARKET

FOREX-Dollar edges higher on economic optimism, sterling eyes BoE – Reuters


    * Graphic: World FX rates tmsnrt.rs/2RBWI5E
    * Dollar supported against euro and yen
    * Sterling in focus before BoE meeting
    * U.S. stimulus, vaccine progress give markets hope

    By Stanley White
    TOKYO, Feb 4 (Reuters) - The dollar edged toward its
strongest in more than two months against the euro and the yen
on Thursday as pessimism about the U.S. economic outlook receded
before the release of important data on the jobs market.
    The British pound fell against the dollar but traded near an
eight-month high versus the euro ahead of a Bank of England
policy meeting that will publish findings on the feasibility of
negative interest rates.
    Sentiment for the dollar has improved recently as progress
in coronavirus vaccinations, moves by U.S. President Joe Biden
to pass more fiscal stimulus, and improving economic data forced
some bearish investors to give up their short positions.
    The dollar faces another test on Friday with the release of
non-farm payrolls data, which will help confirm whether the
world's largest economy has shrugged off a dip in growth toward
the end of last year.
    "The dollar's recovery was triggered by a rebound in yields
and an increase in inflation expectations," said Junichi
Ishikawa, senior foreign exchange strategist at IG Securities.
    "This is supporting the dollar, which now has more room to
rise against the euro, because the euro zone looks like it is
lagging behind U.S. economic growth."
    Against the euro, the dollar stood at $1.2015,
close to a nine-week high.
    The pound fell to $1.3601, adding to a 0.2% decline
in the previous session. Sterling traded at 88.30 pence per euro
, near the strongest since May last year.
    The dollar was quoted at 105.13 yen, near its
highest since mid-November.
    Data due on Friday is forecast to show the U.S. economy
added 50,000 jobs in January, which would be a mild recovery
from shedding 140,000 jobs in the previous month as a spike in
coronavirus infections curbed economic activity.
    Since the start of the year expectations for big fiscal
stimulus under Biden's Democratic government have supported
sentiment. 
    The pace of vaccinations in the United States has also
picked up, causing many investors to temper their pessimism.
    The dollar index against a basket of six major
currencies rose 0.2% to 91.269, not far from the highest since
early December.
    The Bank of England is not expected to change interest rates
or quantitative easing at its meeting on Thursday, but sterling
will be closely watched as investors try to measure the
likelihood of negative interest rates.
    In the cryptocurrency market, ethereum hit a 
record of $1,698 ahead of the listing of ethereum futures on the
Chicago Mercantile Exchange next week.
    Bitcoin, the most popular crypto currency, held
steady at $37,970.
    Elsewhere, the Australian dollar edged up to
$0.7626, supported by hopes for U.S. stimulus and progress in
securing coronavirus vaccines. 
    Reserve Bank of Australia will update its economic forecasts
on Friday, which could determine whether the Aussie continues to
rise.
    Across the Tasman Sea, the New Zealand dollar fell
to $0.7195.
    
    ========================================================
    Currency bid prices at 2:16PM (0516 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.2015        $1.2035     -0.17%         -1.66%      +1.2043     +1.2014
 Dollar/Yen                   105.1350       105.0700    +0.04%         +1.77%      +105.1450   +105.0200
 Euro/Yen                     126.31         126.39      -0.06%         -0.48%      +126.4600   +126.3000
 Dollar/Swiss                 0.9001         0.8990      +0.14%         +1.75%      +0.9001     +0.8987
 Sterling/Dollar              1.3601         1.3642      -0.30%         -0.45%      +1.3652     +1.3600
 Dollar/Canadian              1.2804         1.2785      +0.15%         +0.55%      +1.2805     +1.2779
 Aussie/Dollar                0.7626         0.7618      +0.11%         -0.86%      +0.7648     +0.7617
 NZ                           0.7195         0.7213      -0.24%         +0.21%      +0.7224     +0.7191
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ 

    
 (Reporting by Stanley White; Editing by Aurora Ellis, Gerry
Doyle and Simon Cameron-Moore)
  

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