Dollar, shares shaky ahead of U.S. jobs data

Fri Jun 7, 2013 8:02am EDT
 
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By Richard Hubbard

LONDON (Reuters) - The dollar sank to a two-month low against a resurgent yen on Friday and world shares headed for a third week of losses as markets experienced an uneasy run-up to U.S. jobs data later in the session.

The non-farm payrolls report due at 1230 GMT is expected to show a 170,000 rise in jobs for May, suggesting the economy is still in a rut and not ready for the Federal Reserve to cut back monetary support.

A strong number would fuel fears of an early tapering of the Fed's extensive quantitative easing (QE) program bond, with implications for all riskier assets.

"The markets are quite nervous about it ... They need reassurance about QE to be stable, so a strong number would cause a disruption," said Hans Peterson, global head of investment strategy at SEB Private Banking.

World share markets have begun to price in expectations of a tapering in Fed spending, hovering near six-week lows on Friday with U.S. stock futures pointing to further weakness on Wall Street ahead. .N

Also reflecting declining hopes for rate cuts from the European Central Bank, European shares .FTEU3 lost 0.2 percent to 1,176.16 points at 1200 GMT, staying near the six-week lows they touched in a selloff on Thursday.

JAPAN FEARS

The dollar dropped 1.5 percent against the stronger yen to hit a low of 95.28 yen, a day after posting its biggest fall against the Japanese currency in three years.   Continued...

 
A man walks through the lobby of the London Stock Exchange August 5, 2011. REUTERS/Suzanne Plunkett