* Euro hits 4-mo low vs. dollar
* Asian stocks ease but Nikkei extends outperformance
* Materials, energy weaker as dlr strength weighs on commods
* Portugal to lead Euro sovereign debt auctions next week
By Vikram S. Subhedar
HONG KONG, Jan 7 (Reuters) - The euro slumped to a
four-month low against the dollar on Friday and looked set for
more weakness if U.S. payrolls data meets recently raised
forecasts, strengthening the case for a sustainable economic
recovery.
The greenback remained buoyed by an unexpectedly strong
ADP employment report earlier in the week which showed a
record number of private sector jobs created in December and
prompted economists to raise their forecasts for the payrolls
data.
"The U.S. jobs number is a mega factor going into 2011 for
policymakers as well as markets," said Tom Kaan, a director at
Hong Kong-based Louis Capital Markets.
"I'd say the recent dollar strength is more likely due to
profit-taking on short positions because people were so
bearish but if we see U.S. unemployment dip even slightly,
it'll mean that things have actually started getting better,"
said Kaan.
Non-farm payrolls probably increased by an estimated
175,000 in December and the jobless rate eased to 9.7 percent
from 9.8 percent, according to a Reuters survey.
The U.S. Labor Department will release the closely watched
report at 8:30 a.m. (1330 GMT)
Another key event on Friday is Federal Reserve Chairman
Ben Bernanke's testimony on the U.S. economic outlook to the
Senate Budget Committee, which investors will scrutinise for
updates on the Fed's plan to continue buying bonds until June.
The dollar index , which measures the greenback's
performance against a basket of major currencies, on Friday
hit a high of 80.95, a level last seen in early December.
A selloff in peripheral euro zone government bonds before
a series of bond issues next week, and an EU proposal that
could force those who lend to banks to bear big losses should
they fail, helped knock the single currency lower across the
board. []
Portugal, widely seen as the next euro zone state at the
risk of needing a bailout after Greece and Ireland, will lead
a series of debt auctions from European nations next week.
[]
ASIAN STOCKS EASE, JAPAN OUTPERFORMS
Japan's Nikkei , lifted by a strong day on Chinese
bourses, recovered from earlier losses to make a 0.1 percent
gain on the day, taking its weekly rise to 3 percent and
extending its recent outperformance among Asian markets.
The MSCI Asia ex-Japan fell 0.5 percent
and was down 0.2 percent in its first week of trading for the
year.
Shares in Samsung Electronics , the world's
No.1 memory chip maker, fell 1.3 percent after the company
forecast weaker-than-expected fourth quarter earnings. Most
analysts see this a blip, with demand for many of the
company's businesses, including smartphones, picking up.
Samsung shares are up nearly 25 percent over the past
quarter and hovering near record highs. []
"I think the fourth-quarter results will mark the bottom.
Although its DRAM chip sector may remain in a slump in the
first quarter, other businesses such as LCD will provide a
boost," SK Securities analyst Hwang Yoo-Sik said.
Shanghai's key stocks index rose 1.5 percent,
breaking through key chart resistance, driven by shares in
Chinese banks that have lagged global peers. []
Investors will look ahead to the start of the corporate
earnings season in the U.S. for signs whether an improving
macroeconomic landscape is translating into company profits.
Earnings season kicks off next week with aluminum producer
Alcoa , oil major Chevron and technology
bellwether Intel Corp all expected to provide
insights into global growth and demand.
(Editing by Daniel Magnowski)
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