FOREX-Dollar climbs to two-week peak, shrugs off weak U.S. payrolls

Gertrude Chavez-Dreyfuss

* U.S payrolls weaker than expected in December

* Dollar index on track for best weekly gain in two months

* Yen, Swiss franc fall U.S.-Iran tensions ease

(Recasts, adds U.S. non-farm payrolls data, new analyst comment, updates prices, changes byline, dateline; previous LONDON) NEW YORK, Jan 10 (Reuters) - The U.S. dollar rose two-week highs on Friday, on track for its biggest weekly gain in two months, helped by easing geopolitical tension between the United States and Iran, with investors shrugging off a weaker-than-expected U.S. non-farm payrolls report for December. The soft U.S. payrolls number, which followed a batch of strong economic figures, was unlikely to sway the Federal Reserve from its current neutral stance. The dollar did pare gains after the jobs data, but was overall steady on the day. U.S. data showed that nonfarm payrolls increased by 145,000 jobs last month, lower than the market forecasts of 164,000. Data for October and November was revised to show 14,000 fewer jobs added than previously reported. The economy created 2.1 million jobs in 2019, down from 2.7 million in 2018.

More importantly, average hourly earnings rose three cents, or just 0.1%, after increasing 0.3% in November. Markets were expecting a 0.3% rise. "This doesn't change Fed policy though. The Fed is quite comfortable being on the sidelines for now," said Bipan Rai, North American head of FX strategy, at CIBC Capital Markets in Toronto. "What it does mean is that the U.S. dollar would be on the defensive. Certainly, being long dollar has been a popular position for some time so investors would be looking to clear out those positions." Against a basket of currencies, the dollar gained 0.1% on Friday to 97.50, taking its cumulative gains this week to 0.7%, on track for its biggest weekly rise since early November. During the session, the dollar index hit a two-week high of 97.584. The dollar was also modestly higher versus the safe-haven yen at 109.58 yen after touching a four-week peak during the session. The greenback also rose 0.2% versus the Swiss franc at 0.9748. The yen's and Swiss franc's losses reflected fading worries about an imminent U.S-Iran conflict. "The galvanizing force for the dollar rally this week was the fizzling of tensions in the Middle East with the recent U.S. data also giving investors some further room for optimism," said Ricardo Evangelista, a senior analyst at ActivTrades. The euro was also down 0.1% against the dollar at $1.1100.


Currency bid prices at 10:01AM (1501 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low BidPrevious Change


Euro/Dollar EUR= $1.1100 $1.1105 -0.05% -0.99%+1.1113 +1.1086Dollar/Yen JPY= 109.5800 109.5100 +0.06% +0.66%+109.6900 +109.4700Euro/Yen EURJPY= 121.64 121.62 +0.02% -0.25%+121.7700 +121.5300Dollar/Swiss CHF= 0.9744 0.9731 +0.13% +0.68%+0.9762 +0.9727Sterling/Dollar GBP= 1.3058 1.3065 -0.05% -1.52%+1.3095 +1.3049Dollar/Canadian CAD= 1.3045 1.3054 -0.07% +0.45%+1.3075 +1.3029Australian/Doll AUD= 0.6886 0.6857 +0.42% -1.92%+0.6892 +0.6851


Euro/Swiss EURCHF= 1.0816 1.0807 +0.08% -0.33%+1.0829 +1.0805Euro/Sterling EURGBP= 0.8499 0.8499 +0.00% +0.53%+0.8506 +0.8481NZ NZD= 0.6620 0.6614 +0.09% -1.72%+0.6632 +0.6603


Dollar/Norway NOK= 8.9000 8.8803 +0.22% +1.39%+8.9125 +8.8729Euro/Norway EURNOK= 9.8790 9.8652 +0.14% +0.42%+9.8865 +9.8527Dollar/Sweden SEK= 9.5077 9.4886 +0.12% +1.71%+9.5216 +9.4801Euro/Sweden EURSEK= 10.5544 10.5417 +0.12% +0.81%+10.5574 +10.5316

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Saikat Chatterjee in London; Editing by David Gregorio)