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Dollar pressured after US jobs data

Singapore -The dollar faced fresh pressure in Asian trade Monday as lacklustre US jobs data fuelled speculation about the Federal Reserve's plans to wind down its stimulus programme.

The euro bought $1.3678 in mid-morning Singapore trade from $1.3666 in New York on Friday. The greenback eased to ¥103.29 from ¥104.15. The euro bought ¥141.27 from ¥142.33.

Japanese financial markets were closed for a public holiday.

The greenback's losses extended those seen in New York on Friday after data from the US Labor Department showed the economy added a mere 74 000 jobs in December, well below the consensus estimate of 197 000.

The unemployment rate dropped to 6.7%, from 7.0% in November, although that was mostly because more people had given up looking for work.

The Fed last month said it would cut its monthly bond purchases by $10bn to $75bn in January as the economy shows signs of strengthening and the unemployment rate falls. Analysts were eagerly awaiting the jobs numbers as they were seen to likely influence whether further cuts would follow swiftly.

"The dollar traded much lower against all majors following the appalling jobs report," Desmond Chua, market analyst at CMC Markets in Singapore, wrote in a note.

However, French bank Credit Agricole said the jobs data was not likely to alter the Fed's plan to continue with its so-called "tapering".

"Adverse weather may have played a role in the weakness, while complicating matters was the drop in the unemployment rate to 6.7% largely due to people leaving the jobs market," it said in a note.

The lender said the euro faced downside risks after European Central Bank (ECB) president Mario Draghi last week said the ECB governing council had discussed using "all eligible instruments allowed by the (EU) treaty" if inflation in the 18-nation economic bloc continues to fall.

"From that angle it cannot be ruled out that more aggressive policy action such as quantitative easing will be considered if monetary conditions tighten further," Credit Agricole said.


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