(Corrects in first paragraph to indicate dollar rose.)
* U.S. trade deficit narrower than expected
* SNB says would act "decisively" on Swiss franc.
* NZ dollar falls after RBNZ holds rates
(Recasts, updates prices, adds comment)
NEW YORK, March 11 (Reuters) - The dollar rose against the
euro on Thursday after seeing a smaller-than-expected U.S.
trade deficit, with trading volatile as investors first drove
up the euro on increased risk appetite then sold the currency
after it failed to break recent ranges.
The U.S. trade deficit shrank to $37.29 billion in January
from a revised $39.9 billion in December, government data
showed. For details, see []. Economists were
expecting a deficit of $41 billion.
A separate government report showed the number of U.S.
workers filing new applications for unemployment insurance were
slightly higher than expected last week, hinting at a slow
labor market recovery. [].
The Swiss franc fell after the Swiss National Bank said it
would act "decisively" to counter any excessive rise in the
Swiss franc.
"Initially there was a knee-jerk reaction to the
better-than-expected U.S. trade report," said Michael Woolfolk,
BNY Mellon currency strategist. "What is good for the U.S. is
good for risk appetite. Now, there is not enough juice in the
report to test the upside range" on the euro.
In early New York trade, the euro was down 0.2 percent at
$1.3626 <EUR=>. The session peak was $1.3687 with a low of
$1.3620.
Woolfolk said the euro is stuck in a range of $1.3500 to
$1.3700.
Greece may also have been weighing on the euro after German
Chancellor Angela Merkel said the first priority for Greece was
to win back the confidence of financial markets, and the
debt-stricken country's first steps were a positive start.
"Confidence in the markets and in the euro can only be
regained when Greece itself makes (Greece) work," Merkel said.
[]
"There's a perception that the Greek austerity plan is only
a temporary pause on sovereign debt risk, and there's concern
that there could be problems in Portugal, Spain, Ireland," said
Michael Malpede, market analyst, Easy Forex, Chicago.
"We'll continue to see very choppy trade action today, as
there's no real incentive to go either way," Malpede said. "If
anything, traders appear to have a preference to sell the euro
on rallies."
SNB EYED
The Swiss central bank announcement came as the SNB left
interest rates on hold and said signs of an economic recovery
were becoming more tangible. [] []
The euro rose to a session high against the Swiss franc
<EURCHF=> of 1.4630 francs compared with 1.4610 just before the
announcement. The euro was last at 1.4619 francs.
The dollar <CHF=> was last around 1.0724 francs, up 0.3
percent.
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For a graphic on moves in euro/Swiss franc on previous
intervention rumours see:
http://graphics.thomsonreuters.com/310/CH_SNB0310.gif
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
The Australian dollar <AUD=> fell 0.4 percent against the
U.S. dollar to $0.9114, also swinging between gains and losses
in the global session after strong Chinese data and on data
showing a smaller-than-expected rise in Australian employment.
Chinese inflation rose to a 16-month high and other
economic data showed broad-based strength. [] That
initially fuelled expectations of possible further monetary
tightening by Beijing.
The New Zealand dollar fell 0.7 percent to $0.6968 after
the central bank said there was no urgency to lift interest
rates off their current record lows. []
[]
The dollar <JPY=> was down 0.1 percent at 90.40 yen, having
touched a two week high on Wednesday.
(Reporting by Nick Olivari, Additional reporting by Steven C
Johnson in New York, Editing by Chizu Nomiyama)
