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Poll: Dollar bulls to stay put despite payrolls shock

The U.S. dollar's decline to multi-week lows against the Japanese yen following Friday's shockingly weak U.S. jobs number represents just a temporary setback for the greenback, CNBC's latest poll of currency traders, analysts and strategists showed.

"Weaker payrolls will provide better entry levels to go long dollars," said Khoon Goh, Senior FX Strategist at ANZ.

Friday's U.S. jobs report for December took many currency traders by surprise. Data showed the creation of just 74,000 new jobs, well short of the 196,000 that analysts had expected, Reuters reported.

(Read more: Dollar bulls - Time to pack up and go home?)

Nearly 60 percent of CNBC poll respondents (17 out of 29) believe the U.S. dollar will recover this week after dipping to its lowest level in four weeks against the yen. The greenback fell to 102.86 yen on Monday, its weakest point against the yen since Dec. 18.

Buying opportunity

Prior to the December payrolls release, Standard Chartered's senior FX strategist Thomas Harr came closest to predicting the dollar's demise if the jobs number printed missed the 200,000 consensus. The dollar-yen may weaken to 103.50 or 103.00, Harr forecasted, while U.S. Treasurys would rally should payrolls fail to match expectations.

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Dollar bulls maintain that one month's poor data alone won't force the Federal Reserve to slowdown planned cutbacks to its bond purchase program, now down to a monthly rate of $75 billion.

"Sequentially better employment reports are ahead," said David Kotok, Chief Investment Officer at U.S. money manager Cumberland Advisors - with $2.3 billion assets under management. "Revisions will reveal how much," he added.

(Read more: Traders eye retail sales data, earnings as volatility jumps)

Mansoor Mohi-uddin, Head of Foreign Exchange Strategy at UBS said the Fed will likely look through the weather-affected December employment report and continue to taper its asset purchases. "We thus see Friday's sell off in the dollar as a longer-term opportunity to buy the greenback."

However, dollar bears warned that the currency is vulnerable to another round of selling if weather-related distortions make January's jobs report equally bad.

About 20 percent of those polled (6 out of 29) expect the dollar to continue to weaken while the remaining six believe the currency will trade at current levels.

(Read more: These currencieswill fare worst vs the dollar in 2014)

"The dismal [payrolls] number has opened the door for speculation about a slowing of the QE [quantitative easing] 'taper' process, evident in the JPY and AUD rallies to start the week," said Ilya Spivak, currency strategist at FXCM Live.

"I don't think the FOMC is going to abandon its medium-term trajectory on the basis of one data point, but that certainly won't prevent the markets from weighing up the possibilities and for this process to be reflected in price action."

By CNBC's Sri Jegarajah. Follow him on Twitter @cnbcSri

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