* Dollar under pressure as risk appetite improves
* FX market lacks clear direction until US jobs report on Fri
* Aussie hits 3-week high vs dollar, 2-year peak vs euro
* Dollar/yen extends falls, triggered by stop-loss sales
By Rika Otsuka
TOKYO, Jan 5 (Reuters) - The dollar slipped against a basket
of currencies on Tuesday as growing hopes for a global economic
recovery encouraged investors to shift funds to riskier assets
from the greenback.
The dollar was also under pressure from fund mangers trying
to rebuild their portfolios at the start of the year by buying
stocks, commodities and higher-yielding currencies.
The U.S. currency extended losses against the yen, triggered
by stop-loss orders below 92.10 yen and also below 92.00 yen,
traders said. The fall in dollar/yen dragged down yen crosses,
which succumbed to profit-taking, they said.
The Australian dollar hit a two-year high against the euro
and a three-week high versus the dollar as investors picked up
commodity-linked currencies on buoyant gold and oil prices. []
[]
"Investors are seeking more risks thanks to better economic
conditions," said Tsutomu Soma, senior manager of the foreign
securities department at Okasan Securities.
"But whether risk-taking moves will carry on depends on U.S.
jobs data due on Jan. 8," Soma said. "Investors feel they need to
have the employment data to confirm the U.S. economy is improving
solidly."
The median forecast of analysts polled by Reuters on the U.S.
Labor Department's monthly payrolls report for December is for a
decline of 8,000. However, the predictions ranged widely, from a
loss of 80,000 jobs to an increase of 59,000. []
The dollar index, a gauge of the U.S. currency's performance
against six other major currencies, was down 0.4 percent at
77.203 <.DXY>.
The euro was up 0.3 percent from late U.S. trade at $1.4457
<EUR=> after advancing 0.6 percent the previous day.
Risk appetite grew on Monday after data showed Chinese
manufacturing increased at its fastest pace on record in
December, while U.S. factories marked their best month in nearly
four years, boosting confidence in the global economy.
[]
For much of the past year, expectations that U.S. interest
rates would stay low for a long time spurred investors to sell
the greenback to purchase riskier and high-yielding assets.
But that pattern was interrupted in December on
position-closing before the year-end, and as signs of an
improving U.S. economy prompted some to believe the Federal
Reserve could start to tighten monetary policy in 2010.
Speculators increased bets the U.S. currency has room to rise
by going long the dollar for a second straight week to Dec. 29,
according to Commodity Futures Trading Commission data released
on Monday.
The value of the dollar's net long position was around $4.76
billion, a big jump from a net long position of $700 million in
the prior week, according to Reuters calculations.
[]
The dollar fell 0.8 percent against the yen to 91.75 yen
<JPY=> on Tuesday, having dropped from a four-month peak of 93.22
yen hit on trading platform EBS on Monday.
Many cited profit-taking on the dollar's surge from a 14-year
through of 84.82 yen struck in late November as being behind
Tuesday's fall in dollar/yen, while others said news that Japan's
Sumitomo Mitsui Financial Group <8316.T> plans to raise up to 800
billion yen by issuing new shares has also given a support to the
yen. []
Traders said the dollar is likely to find support around
91.30 yen -- a 50 percent Fibonacci retracement of the
greenback's fall from its high in August of 97.79 yen down to the
14-year trough.
Yen crosses were broadly down with the euro dropping 0.5
percent to 132.65 yen <EURJPY=R>, the Australian dollar down 0.7
percent at 83.85 yen and the New Zealand dollar falling 0.8
percent to 67.37 yen.
The Australian dollar rose as far as $0.9164, its highest
since Dec. 15, according to Reuters data. It then eased back to
$0.9144 <AUD=D4>, up 0.2 percent from late U.S. trade.
Against the euro, the Australian dollar climbed to a two-year
high of 0.6346 euros <AUDEUR=R>.
Given a rise in commodities, higher equities and the
Australian dollar's yield advantage over other currencies,
investors feel comfortable about buying the currency, said
Yasutoshi Nagai, chief economist at Daiwa Securities Capital
Markets.
"The Aussie's rise has further to go," Nagai continued. "Some
even say the currency is likely to achieve parity with the U.S.
dollar in the long term."
(Additional reporting by Satomi Noguchi and Kaori Kaneko;
Editing by Joseph Radford)
