Dollar steadies in London

The dollar steadied on Friday, trimming earlier losses as investors braced for a US jobs report which is expected to show a slower pace of job losses, but another rise in the unemployment rate. The dollar earlier eased on improved risk sentiment, but investors squared positions ahead of the US non-farm payrolls data - the last big event risk of the week after a round of central bank decisions which broadly weighed on the dollar.
Increased risk appetite tends to dim the allure of safe-haven and low-yielding dollar. "The dollar caught a little bit of a bid (ahead of the payrolls figures) but the market is incredibly cautious," said Christian Lawrence, currency analysts at RBC Capital Markets. He said a more unpredictable market reaction was likely if the figures were lower than expectations.
Others said even if the numbers were slightly higher than expected, it was unlikely to boost the dollar compared with previous occasions. "The dovish Fed statement this week has raised the bar for a positive jobs number to lead to a higher dollar," said Lee Hardman, currency strategist at Bank of Tokyo-Mitsubishi UFJ. "Only an extremely strong number or an extremely weak number would help the dollar."
A Reuters poll showed a median 175,000 US jobs were shed in October, slower than the 263,000 lost in September, with the jobless rate rising to 9.9 percent. By 1206 GMT, the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was flat at 75.732. The dollar fell after the Fed kept interest rates at record lows on Wednesday and indicated they would stay there for some time.
The euro was flat on the day at $1.4870, holding above key resistance around $1.486 Sterling was supported after the Bank of England on Thursday expanded its asset-purchase programme by 25 billion pounds on Thursday and suggested the scheme may be coming to an end. The dollar was slightly weaker against the yen at 90.57 yen, with the upside capped by a large amount of options with a strike price of 91.00 yen set to expire later in the day.