Dollar Steady as Jobs Data Absorbed

GBP: The British pound stabilized off recent one-week lows against the dollar and yen and an 11-month trade-weighted low against a currency basket. Sterling receive a boost from a bout of profit-taking on its recent losses and by a survey by the Bank of England that pointed to a modest pickup in inflation over the coming year. The four-times-a-year survey by the BoE showed that inflation expectations over the coming 12 months rose to 2.5% from 2.4%. An increase in U.K. price pressures would limit the scope of easing measures at the central bank's disposal.

CHF: As widely expected, Switzerland's central bank kept the target for its benchmark interest rate unchanged at a range of 0.0 to 0.75%. The Swiss National Bank also stepped up its concern about an appreciating franc which poses recovery risks by making exports from the Alpine economy more expensive. In a knee-jerk reaction, the euro rebounded from an earlier one-month low against the Swiss franc following the announcement.

CAD: The Canadian dollar yesterday rose to its highest level since mid-October 2009 against the U.S. dollar, boosted by firmer oil prices around $82 a barrel. Positive loonie sentiment is also supported by Canada's improving economic outlook and by expectations that the Bank of Canada might lift interest rates from record lows later this year. As a top exporter of oil, the Canadian currency often takes its cue from commodity market movements. New housing prices in Canada rose 0.4%(m/m) in January, which was exactly as expected. Canada's trade surplus increased to C$800 million, which was above the C$100 million forecast and far higher than the previous month's 80,000 million surplus. A rise in commodity prices helped to boost Canadian exports in January.

USD: U.S. weekly jobless claims fell by a smaller than expected 6,000 in the latest week to 462,000 from a downwardly revised 468,000. Last week's figure was originally reported at 469,000. Investors had expected a slightly bigger reduction in jobless claims to 460,000 in the latest week. The U.S. trade balance surprisingly narrowed to $37.29 billion in January compared to a revised $39.90 billion in December. Market watchers had expected a trade deficit of $41 billion in January. The unexpected decline in the trade balance was due mainly to a fell in oil imports, which dropped to a Feb. 1999 low in January.

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