Dollar Ends Drop as Jobless Claims Seen Pointing to Labor Gains

London (May 1)  The dollar halted a drop from yesterday versus the yen before reports this week forecast to show initial jobless claims fell and employers increased the pace of hiring last month.

The greenback was supported as U.S. figures today may show consumer spending and manufacturing growth accelerated, after the Federal Reserve said yesterday it will keep trimming asset purchases. Australia’s dollar held a two-day gain before data projected to signal Chinese manufacturing picked up. New Zealand’s kiwi held a gain from yesterday as a gauge of expected currency swings fell to the lowest in almost seven years.

“There’s a risk that the payrolls number will surprise to the upside,” said Kazuo Shirai, trader at Union Bank NA in Los Angeles. “The Fed has not weakened its stance on the economic outlook. The dollar will be supported above 102 yen.”

The dollar fetched 102.25 yen as of 9:10 a.m. in Tokyo from 102.24 yesterday, when it fell 0.4 percent. It was unchanged at $1.3867 per euro after declining 0.4 percent in New York. The yen was little changed at 141.80 per euro.

The Bloomberg Dollar Spot Index, which monitors the greenback against 10 major counterparts, was at 1,008.35 from 1,008.01.

Singapore, South Korea, China, Hong Kong and Switzerland are among the markets closed for public holidays today.

Labor Data

Initial jobless claims probably fell 9,000 to 320,000 in the week ended April 26, according to the median estimate in a Bloomberg News survey before a Labor Department report today. Data due May 2 may show 215,000 jobs were added in April, up from 192,000 the previous month, a separate poll shows.

Household purchases, which account for almost 70 percent of the U.S. economy, grew 0.6 percent in March and the Institute for Supply Management’s manufacturing index rose to 54.3 last month from 53.7, reports today are forecast to show.

The U.S. dollar fell 3.1 percent in the past three months, according to Bloomberg Correlation Weighted Indexes which track 10 developed nation currencies. The yen has declined 3.3 percent while the euro is little changed.

The kiwi’s 3.9 percent advance over the period was the biggest gain. The currency traded at 86.09 U.S. cents after advancing 0.8 percent yesterday.

Deutsche Bank AG’s volatility index, based on three-month options for nine major currency pairs, dropped to 6.13 percent, set for the lowest close since July 2007.

China’s Purchasing Managers’ Index rose to 50.5 in April from 50.3 the previous month, the National Bureau of Statistics and China Federation of Logistics and Purchasing is forecast to say today, according to the median economist estimate in a Bloomberg poll. A number above 50 signals expansion.