* Majors in tight range, cautious ahead of jobs data
* Improved risk appetite boosts high-yielders
* But yen and Swiss franc remain under pressure
(Adds quotes, updates prices)
By Kirsten Donovan
LONDON, Feb 6 (Reuters) - The dollar was hemmed into tight
ranges against the euro and yen on Friday, with caution
prevailing ahead of U.S. jobs data which is expected to
underscore a grim economic picture.
Rising equities suggested a slight improvement in approach
to risk, which boosted perceived higher-yielding currencies
including the Australian <AUD=> and New Zealand <NZD=> dollars
and kept pressure on the yen <JPY=> and Swiss franc <CHF=>
<EURCHF=>.
The dollar recovered against the yen from levels seen in
late U.S. trade on Thursday but was still below a nearly
one-month high hit as U.S. stocks rallied.
Traders were wary of committing firmly in one direction
ahead of data that is expected to show more than half a million
U.S. jobs were lost in January.
The U.S. unemployment rate is likely to have climbed to 7.5
percent in January, from 7.2 percent a month earlier, with
525,000 jobs forecast to have been shed <ECON> <ECONUS>.
In a grim precursor to the U.S. report, Canada posted a
record number of job losses in January.
"The market is prepared for a weak number so although there
will be a bit of volatility over the data, overall so long as
equity markets continue to hold up quite well we should have the
opportunity to see .... some gains against the dollar," said Ian
Stannard, senior FX strategist at BNP Paribas.
At 1247 GMT, the dollar was flat at 91.12 yen after climbing
above 92 yen on Thursday, while the euro rose 0.1 percent to
116.66 yen <EURJPY=>. European shares rose 0.6 percent, while
U.S. stock futures pointed to a firmer Wall Street open.
The euro was up 0.1 percent against the dollar at $1.2795.
Data released earlier showed German industrial output fell a
larger-than-expected 4.6 percent in December from the previous
month.
"The data from the euro zone constantly surprises to the
downside, suggesting the market has not fully adjusted their
expectations with regards to the euro zone and suggesting the
euro will remain under pressure," BNP Paribas' Stannard said.
The European Central Bank kept interest rates unchanged on
Thursday but indicated more easing next month, as widely
expected.
Analysts also said the euro will remain under pressure as
the Russian rouble's decline has prompted Russian authorities to
sell euros for dollars to maintain the balance of their reserves
portfolio.
The rouble tested its new trading floor against a
euro-dollar basket for the first time on Thursday. It was
trading just above the trading floor of 41 on Friday.
BEYOND PAYROLLS
Looking past the U.S. payrolls number, analysts said
sentiment next week could be dictated by the U.S.
administration's bank rescue plan to be unveiled on Monday.
Despite the blanket of bad news, investors were buoyed by
hopes U.S. lawmakers will pass a $900 billion stimulus package
which President Barack Obama said was needed urgently to stave
off "catastrophe".
"The market already expects a weak jobs report, so the
financial plan on Monday will be the main driver," said Lee
Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
Meanwhile, sterling <GBP=> <EURGBP=> jumped to a two-month
high against the euro on Friday, gaining from a growing view
that UK interest rates are near their trough compared with the
euro zone. The euro was down 0.2 percent at 87.24 pence.
The pound was was up 0.3 percent to $1.4671, after climbing
when the Bank of England cut interest rates to a record low of 1
percent on Thursday.
(Reporting by Kirsten Donovan; Editing by Ruth Pitchford)
