FOREX-Aussie up on jobs data; China fund remarks lift euro

Thu Jun 10, 2010 11:41am IST

* Strong Aussie jobs, China trade data boost risk appetite

* Chinese pension fund comments help a battered euro

* ECB meeting in focus

* Kiwi gains after slightly positive RBNZ statement

By Satomi Noguchi

TOKYO, June 10 (Reuters) - The Australian dollar jumped on Thursday on upbeat Aussie jobs data and strong Chinese exports, while the euro bounced on short-covering after the head of China's national pension fund said the currency would weather Europe's debt crisis.

A stronger-than-expected rise in Australian employment numbers for May and a near 50 percent surge in Chinese exports the same month ran counter to persistent fears the global economy was starting to falter amid euro zone debt woes.

Dai Xianglong, chairman of $114 billion China's National Social Security Fund, said the euro would gradually stabilise and that the U.S. fiscal deficit remained a big concern. [ID:nTOE659041]

The euro rose 0.7 percent on the day to around $1.2059 EUR=EBS and at one point climbed as high as $1.2064, up more than one U.S. cent from an earlier low of $1.1957.

It has risen about 1.5 percent since hitting a four-year low of $1.1876 on trading platform EBS on Monday.

"Traders are buying back the euro for now but there aren't strong factors to support the euro. I expect the euro will meet solid resistance near $1.22," said Koji Fukaya, a senior currency analyst at Deutsche Bank in Tokyo.

Traders expect the euro to come under pressure again after short-covering runs its course, with many market players looking to see if the European Central Bank, which meets later in the day, plans new efforts to help troubled euro zone countries.

The ECB is expected to keep interest rates at a record low when it meets on Thursday. [ID:nLDE6521S4]

Against the yen, the euro rose 0.5 percent to 109.85 yen EURJPY=R and the dollar was little changed at 91.20 yen JPY=.

The Australian dollar rallied as much as 1.5 percent at one point after Australia added 26,900 jobs in May, much more than an expected 17,500. It later changed hands at $0.8365 AUD=D4, up about 1.2 percent on the day.

Data also showed full-time jobs again blew away forecasts with a big 36,400 jump and the jobless rate also surprised by dipping to 5.2 percent. That suggests wage pressures could begin to build and that there was more risk of further increases in interest rates than currently priced by markets.[ID:nSGE658092]

The Aussie added to its gains after China confirmed faster exports. China's exports rose 48.5 percent in May from a year earlier and imports were up 48.3 percent.[ID:nTOE65605K]

"The data from Australia and China, together with remarks from (Fed Chairman) Bernanke yesterday on the U.S. economy, suggest that the European debt problems have so far not been damaging economies elsewhere," said Minoru Shioiri, chief manager of forex trading at Mitsubishi UFJ Morgan Stanley Securities.

"But recent heavy price movements in stock markets indicate it's hard to expect a full recovery of sentiment in the financial markets soon," Shioiri said.

The New Zealand dollar climbed after the country's central bank sounded slightly more positive than expected in its policy statement. It raised interest rates for the first time since the global crisis, as widely expected, and investors looked for more rate rises in coming months. [ID:nSGE65701N][nWEL004070]

The New Zealand dollar was up 1 percent at $0.6786 NZD=D4. (Additional reporting by Hideyuki Sano; Editing by Edwina Gibbs)

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