FOREX-Yen off to a soft start as Asian stocks eyed

Reuters - UK Focus

* Yen waits to see if Asian stocks will track Wall Streetrally

* Disappointing U.S. jobs data fails to ignite safety flows

* Commodity currencies in the limelight

By Ian Chua

SYDNEY, Feb 10 (Reuters) - The yen wallowed at one-week lowsagainst the dollar and euro early on Monday, having been beatendown late last week as U.S. stocks rallied after investors gotover a disappointing set of headlines on the U.S. labour market.

Traders said expectations that Asian stocks could track WallStreet were keeping a lid on demand for the low-yieldingJapanese currency for now.

The dollar bought 102.65 yen, while the euro fetched139.79 yen, both at their highest since late January.Against the greenback, the euro traded at $1.3623, notfar from a one-week high of $1.3649 reached on Friday.

Last week was a frustrating one for the market with twomajor events: the European Central Bank policy review and U.S.payrolls data both providing no new leads.

While the rise of 113,000 U.S. payrolls was well short of aforecast increase of 185,000, the details were not bad enough tosway the Federal Reserve from steadily winding down itsbond-buying stimulus, traders said.

Indeed, the unemployment rate actually fell to a five-yearlow of 6.6 percent even as Americans piled back into the labourmarket in search for work.

"The detailed data suggests the U.S. is indeed movingtowards a stronger economy and that the unwinding of monetarystimulus will be taken in stride," said Evans Lucas, marketstrategist at IG (LSE: IGG.L - news) in Melbourne.

"It also suggests the headline data, while disappointing onthe surface, is actually moving towards the FOMC's 'trigger'points at a pace the board will be more than pleased with."

The U.S. jobs data came a day after the ECB took no newaction at its policy review, although it gave a fairly clearsteer that action could be taken next month if new internalforecasts show a further deterioration in inflation.

All of that left the dollar, euro and yen pretty much backat where they were a week ago. This week, traders will belooking at Fed Chair Janet Yellen's first Congressionaltestimony and economic growth data from the euro zone for freshcues.

In contrast, dollar bloc commodity currencies came intotheir own with the Australian, Canadian and New Zealand dollarsposting their best weekly gain in about five months.

The Aussie rallied after the Reserve Bank of Australiadropped its bias to ease, while upbeat local data gave theloonie and kiwi a boost.

Figures on Friday showed Canada recouped 29,400 of the44,000 jobs lost in December, and the unemployment rate fell to7.0 percent from 7.2 percent, diminishing talk of a possibleinterest rate cut by the central bank.

That saw the loonie climb to its highest in over two weeks.It was last at C$1.1038 per U.S. dollar, having risento C$1.0968.

The Aussie traded at $0.8957, not far from afour-week peak of $0.8999 set on Friday, while the kiwi bought$0.8280, near a 1-1/2 week high of $0.8297.

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