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FOREX-Dollar drives higher as traders look to Fed clues from U.S. jobs data

    * Graphic: World FX rates tmsnrt.rs/2RBWI5E

    By Tom Westbrook
    SINGAPORE, June 30 (Reuters) - The dollar clung to recent
gains on Wednesday as virus woes raised concerns in a market
already on edge ahead of U.S. jobs data seen as crucial to the
Federal Reserve's monetary policy outlook.
    Risk-sensitive commodity currencies had led overnight
losses, with the Australian and New Zealand dollars each
dropping about 0.7%. The euro fell 0.2% overnight while the
safe-havens of Japanese yen and the Swiss franc held steady.
    Morning trading in Asia did not move majors much from those
levels, with the euro last at $1.1902 and the yen
at 110.58 per dollar. The Aussie bought $0.7517.  
 
    "There's a bit of a bearish tilt to currencies," said
Westpac analyst Sean Callow. "It's the line you would expect on
a risk-off day, and maybe it's a bit of insurance ahead of
payrolls," he added, referring to U.S. labour data due Friday.
    The dollar index rose 0.2% to hit a one-week high
overnight and on Wednesday sat roughly in the middle of the
range it has found in the wake of the surprisingly hawkish shift
in tone from the Fed earlier this month.
    The risk-averse mood was underpinned by a fresh spike in
global coronavirus infections and in restrictive measures to
contain them which threaten to set back the pandemic recovery.
    Case counts are hitting daily records in Indonesia,
lockdowns are being extended in Malaysia and expanded in
Australia, while travellers from Britain are facing new
restrictions as the contagious delta variant spreads.
    At the same time traders are wary of a surprise from U.S.
economic data, starting with private payrolls later on Wednesday
but with the main focus on fuller labour figures due on Friday.
    Signs of strength in the labour market could add pressure on
the Fed to move even sooner on interest rate hikes, and lift the
dollar, while it is vulnerable if the data misses expectations.
    "It's unusually hard to forecast and so the risk of a
surprise is enormous," said Westpac's Callow. "Super strong
could really reinforce the reaction to the (Fed) and very weak
could really push back on those who bought dollars post (Fed)."
    Economists polled by Reuters forecast private payrolls
showing a gain of 600,000 in June, a slowdown from a month ago
when 987,000 jobs were created. The forecast for Friday's
non-farm payrolls is for a rise of 690,000 jobs.
    "It's not just about non-farm payrolls, but about the whole
labour market," said Rodrigo Catril, senior FX strategist at
National Australia Bank in Sydney, with hourly earnings and the
unemployment rate also likely to be closely watched.
    "There's also a wide dispersion in terms of estimates which
suggests that either way there will be a few disappointed with a
soft number as well as a really strong number."

    ========================================================
    Currency bid prices at 108 GMT
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar                  $1.1900        $1.1896     +0.03%         -2.60%      +1.1907     +1.1894
 Dollar/Yen                   110.5450       110.5400    +0.02%         +7.04%      +110.5900   +110.5600
 Euro/Yen         <EURJPY=EB  131.55         131.49      +0.05%         +3.65%      +131.6500   +131.5000
                  S>                                                                            
 Dollar/Swiss                 0.9211         0.9212      -0.02%         +4.11%      +0.9212     +0.9208
 Sterling/Dollar              1.3850         1.3840      +0.10%         +1.40%      +1.3854     +1.3839
 Dollar/Canadian              1.2402         1.2404      -0.02%         -2.61%      +1.2403     +1.2368
 Aussie/Dollar                0.7513         0.7513      +0.03%         -2.31%      +0.7520     +0.7510
 NZ                           0.6993         0.6994      +0.00%         -2.60%      +0.6996     +0.6989
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Volatilities 
Tokyo Forex market info from BOJ

    
 (Reporting by Tom Westbrook.
Editing by Shri Navaratnam)
  
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