* Aussie jumps vs yen, dollar after jobs data beats forecasts
* Euro hits 2-month high but not yet clear of $1.2673 barrier
* Yen crosses rise as risk back on short-term
* Yen and dollar both defensive, DXY at 2-month low
By Charlotte Cooper
TOKYO, July 8 (Reuters) - The euro pushed to a two-month high
against the dollar on Thursday as short-covering kicked in after
strong Australian jobs data sent the Aussie dollar up and helped
gains in other currencies against the greenback and yen.
The low-yielding yen was one of the biggest losers on the day
in what some said was a largely a technical rebound in riskier
trades, while the euro's gains quickly ran into profit-taking.
Australian employment surged past all expectations, rising by
45,900 against forecasts for 17,500, and the unemployment rate
eased, reviving talk of a rate hike in the next few months and
eroding arguments for a possible cut. []
The data sent the Aussie up more than half a U.S. cent and
more than half a yen to its strongest levels since late June, and
helped the euro breach resistance at $1.2673 before it faltered.
"The Aussie numbers came in monster. You couldn't fault any
of the detail really, it was an all-round fairly strong number,"
said Sue Trinh, senior currency strategist at Royal Bank of
Canada in Hong Kong.
"Unsurprisingly the Aussie is up, with bill futures also
coming off. This leaves the door wide open for a rate hike in
August should CPI prove stronger than expected."
Australian consumer prices data is due on July 28.
The Aussie rose 1.1 percent on the day to $0.8726 <AUD=D4>,
touching its highest in almost two weeks at $0.8748 and pushing
above its 55-day moving average at $0.8664.
Its next resistance is expected around $0.8780, its June 28
high and an area where stop-losses are lined up.
The latest Reuters poll of about 50 analysts showed the
Australian dollar <AUD=D4> is expected to trade between $0.8500
and $0.8600 in the next one to three months, before edging up to
$0.8700 and $0.8800 over the next six to 12 months.
[]
The Aussie climbed 1.7 percent on the yen to 77.09 yen
<AUDJPY=R>, touching 77.23 yen, also a high of almost two weeks.
The low-yielding yen has benefited recently as investor
confidence has taken a knock, and data showed China bought a net
$8.4 billion of Japanese bonds, mostly short-term notes, in May,
when the euro slid on heightened concerns over euro zone debt.
But it fell sharply against the euro, dollar and kiwi on
Thursday. An upbeat day on Wall Street after a bullish forecast
from financial firm State Street Corp underpinned improved
tolerance for risk early on and boosted the higher yielders. []
Traders and analysts said, however, that much of the trading
after the Australian data appeared to be interbank and
proprietary rather than client activity, and cautioned that
liquidity was thinning, while none of the factors such as Chinese
or U.S. growth which had been worrying investors had gone away.
"So I think we have risk-on for a few days, and then we have
risk-off for a few days," said Robert Ryan, FX strategist at BNP
Paribas in Singapore.
The next focus for the market is the European Central Bank,
which holds a news conference later after its monthly meeting.
It is expected to face pressure to say whether Europe-wide
stress tests on banks will be tough enough to convince markets of
their worth. [] []
The euro has had a strong run higher since hitting a
four-year low of $1.1876 in early June, driven largely by
short-covering.
It rose 0.1 percent on the day to $1.2654 <EUR=>, after
climbing as far as 1.2688.
Analysts say it could have a bit further to go, but
resistance at its May 21 high of $1.2673 was proving hard to
break cleanly and further resistance at $1.2767-80 was seen as
difficult to overcome on this run higher.
That $1.2767-80 band is where downtrend resistance comes in
as a line connecting the December 2009 and April 14 highs. It is
also a 50 percent retracement of the euro's decline from a
mid-April high and the June low.
Longer term, most analysts in a Reuters poll believe it will
stay weak against the dollar over the coming year. The survey of
about 60 analysts, taken July 2-7, predicted the euro would fall
to $1.24 in one month and $1.20 in three months, then to $1.18 in
six months and in mid-2011. []
The dollar, which has come under pressure in the past week on
concerns about the strength of the U.S. economic recovery, dipped
to a three-month low on the Swiss franc <CHF=> at 1.0481 francs.
On an index <.DXY><=USD> which measures its strength against
six major currencies it slipped to a fresh two-month low of
83.707 before recovering back to 83.90.
The dollar gained on the yen to 88.20 yen <JPY=>, up 0.6
percent on the day and edging further off a seven-month low of
86.96 yen hit at the start of the month, as yields on U.S.
Treasuries rose, making them a bit more attractive to Japanese
investors.
(Additional contribution by Reuters FX analyst Krishna Kumar in
Sydney and Rika Otsuka in Tokyo; Editing by Michael Watson)
