* Investors shrug off U.S. trade and jobless data
* Greece, Spain worries still weigh on investors
* Aussie, kiwi gain on rate hike prospects
* BoE holds rates, SNB keeps FX intervention threat
(Recasts, updates prices, adds details, adds comments)
NEW YORK, Dec 10 (Reuters) - The dollar gained against the
euro on Thursday as a focus on problems in the euro zone
increased some safe-haven demand for the greenback,
overshadowing a narrower-than-expected U.S. trade deficit for
October and some improvement in U.S. jobless claims.
The dollar had fallen against the euro for the second
straight day earlier in the New York session after the U.S.
data, but the gains in the euro were swept away amid ongoing
concerns over the fiscal health of Greece and Spain
Standard & Poor's cut Spain's credit outlook to negative on
Wednesday, a day after Fitch downgraded Greece's credit rating,
sparking concerns about sovereign debt.
The Australian and New Zealand dollars both rose on growing
expectations of higher interest rates.
"Increased sovereign risk associated with the euro will see
some headwinds associated with the euro," said Omer Esiner,
senior market analyst at Travelex Global Business Payments in
Washington.
The euro was last down 0.9 percent at $1.4711 <EUR=>.
Against the yen, the dollar was up 0.5 percent at 88.29 yen
<JPY=> though off the session peak of 88.45 yen.
A European Central Bank Governing Council member, Ewald
Nowotny, said on Thursday the current worries about Greece's
finances would not break up the euro zone [].
"The euro has probably taken a bit of a hit from these
internal problems in the euro zone," said Johan Javeus,
currency strategist at SEB in Stockholm.
The U.S. trade deficit shrank to $32.94 billion in October
from a revised $35.65 billion in September, the government
said. Economists expected a deficit of $36.8 billion for the
month. [] [].
The latest trade numbers finally reflect the positive
implications of a weaker dollar, said Kathy Lien, director of
currency research at GFT Forex. U.S. trade with China was
particularly strong, with exports reaching a record $6.9
billion, "which tells us that the U.S. is also a beneficiary of
the recovery in China."
The U.S. Labor Department reported continuing claims for
jobless benefit, or the number of workers still collecting
benefits after an initial week of aid, fell to 5.16 million in
the latest week from a revised 5.46 million in the prior week
[].
ADVANCE AUSTRALIA FAIR
Strong Australian jobs data fueled anticipation that rates
will rise in Australia, and the Reserve Bank of New Zealand
signaled its rates may go up sooner than thought.
The Australian dollar <AUD=> added 0.9 percent against the
dollar to $0.9171, while the New Zealand dollar <NZD=> gained
1.7 percent to $0.7312, also hitting its highest level since
late November.
Gains in the currencies prompted analysts to speculate the
market may be switching from the recent trend of trading on
risk sentiment, which has seen the euro tend to gain in tandem
with higher-yielders like the Australian dollar.
"Interest rates are becoming a more important factor, and
the market is looking more at fundamentals now," said You-Na
Park, a Commerzbank analyst in Frankfurt.
Sterling was last little changed against the dollar <GBP=>
at $1.6251, and barely budged after a widely expected decision
by the Bank of England to hold interest rates at a record low
0.5 percent and keep its asset-buying program unchanged.
The euro was little changed against the pound at 90.56
pence <EURGBP=>.
The Swiss franc dipped briefly after the Swiss National
Bank (SNB) held interest rates steady and stuck to its pledge
to fight an appreciation of the franc decisively.
[]
This was tempered, however, as the bank dropped its offer
to buy corporate bonds, the first signs it was easing drastic
stimulus measures, and as SNB Chairman Jean-Pierre Roth said
the franc had stayed stable versus the euro. []
The euro briefly rose to a session high around 1.5134
francs <EURCHF=>, according to Reuters data, before dipping to
around 1.5113, little changed on the day.
There was little impact on foreign exchange markets from
remarks by U.S. Treasury Secretary Timothy Geithner on Thursday
that the government had to beware declaring victory too soon
after managing to avert complete financial collapse by bailing
out the nation's banks.[].
(Reporting by Nick Olivari; Additional reporting by Wanfeng
Zhou in New York and Jessica Mortimer in London; Editing by
Leslie Adler
