* EUR/USD steady in Asia at $1.1900; USD/JPY at 110.49
* Commodity currencies nurse losses after Tuesday drop
* All eyes on U.S. labour market data
By Tom Westbrook
SINGAPORE, June 30 (Reuters) - The dollar was headed for its
best monthly rise since March on Wednesday, supported by
traders" trepidation ahead of unpredictable U.S. labour data and
by concern that the spread of the Delta coronavirus variant
could delay the pandemic recovery.
The dollar has gained about 2.5% against a basket of
currencies this month, mostly in the wake of a surprisingly
hawkish shift in the Federal Reserve"s rates outlook. Traders
think it could move sharply in either direction if labour data
this week provides clues as to the pressure on policymakers.
On Wednesday, risk-sensitive and commodity-exposed
currencies nursed the largest losses, after the Australian and
New Zealand dollars had fallen about 0.7% against the dollar on
Tuesday and the Canadian dollar had lost about 0.5%.
They were steady in the Asia session, as were the
safe-havens of Japanese yen and the Swiss franc which held their
own through Tuesday. That left the euro at $1.1900, the
yen at 110.49 per dollar and the Aussie at $0.7518
- all within sight of recent milestone lows against the dollar.
Paul Mackel, global head of FX research at HSBC, said
currency markets seemed to be in transition from closely
tracking the ebb and flow of risk sentiment towards a greater
sensitivity to interest rates, driving a shakeout that has
lifted the dollar.
"There"s been a lot of speculative build-up of short dollar
positions over the last couple of months and we think that these
are being washed out," Mackel told reporters, speaking during an
outlook call.
Indeed, data showed the sharpest fall in the value of bets
against the dollar in three months occurred last week, a boost
for the greenback as the shorts buy dollars to close positions.
The U.S. dollar index, which measures the greenback
against a basket of six major currencies, was steady at 92.041
after touching a one-week high of 92.194 on Tuesday. It has
gained 2.5% through June.
A test of the near-term dollar outlook arrives this week
with U.S. labour data. Signs of strength could add to
inflationary pressure on policymakers to move sooner on rate
hikes, while a miss might put some padding into the timeline.
Private payrolls are due later on Wednesday, but the main
focus is on more comprehensive labour figures due on Friday.
"A lot resides on how payrolls plays out this week for the
big dollar overall," Mackel said. "If that manages to come in
line with expectations then I would assume that Asian currencies
can breathe a sigh of relief."
Economists polled by Reuters forecast private payrolls
showing a gain of 600,000 in June, a slowdown from a month ago
when 987,000 jobs were created.
The average forecast for Friday"s non-farm payrolls is for a
rise of 690,000 jobs, but the variation among the 63 estimates
is large, ranging from 400,000 to more than a million.
"It"s unusually hard to forecast and so the risk of a
surprise is enormous," said Westpac analyst Sean Callow. "Super
strong could really reinforce the reaction to the (Fed) and very
weak could really push back on those who bought dollars."
Besides the looming data, a fresh spike in global
coronavirus infections and in restrictive measures to contain
them kept a lid on currency movements.
Case counts are hitting daily records in Indonesia,
lockdowns are being extended in Malaysia and expanded in
Australia, while travellers from Britain are facing new
restrictions as the contagious delta variant spreads.
Sterling rose 0.1% to $1.3849.
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Currency bid prices at 556 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.1898 $1.1896 +0.02% -2.62% +1.1909 +1.1894
Dollar/Yen 110.4600 110.5400 -0.05% +6.96% +110.5900 +110.4600
Euro/Yen
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