* Dollar higher after U.S. initial weekly claims data
* Move may be on bets dollar will trade on fundamentals
* APEC ministers to call for "market-oriented" forex rates
* Pound continues to struggle
(Recasts, adds quote, updates prices, adds detail)
By Nick Olivari
NEW YORK, Nov 12 (Reuters) - The U.S. dollar rallied
broadly in technical trading after a weekly jobless report
triggered strength in the U.S. currency and momentum pushed it
further through key levels.
While the dollar's early gains came against the yen after a
report showed initial weekly jobless benefit claims lower than
expected, dollar strength spilled over against the euro.
With the euro failing to break and hold above $1.5000 after
testing that level for several days, the dollar gained rapidly
across the board.
The U.S. government said jobless claims fell to 502,000 in
the latest week from a revised 514,000 the prior week. The
forecast was 510,000. [] [].
"Dollar/yen perked up a little bit on the news which is no
real surprise considering that jobless claims continue to fall,
which is encouraging," said Omer Esiner, senior market analyst
at Travelex Global Business Payments in Washington.
The weekly report had greater impact on trading in recent
months because of investor concern the U.S. economic recovery
will be tepid and create few new jobs to replace those lost
during the recession.
Investors bought dollars on bad news as a safe haven, given
the U.S. taxpayer will always pay for government borrowings.
But some may now be buying on the bet the dollar will begin
to trade fundamentally -- gaining on good economic news that
bolsters chances the U.S. central bank will eventually hike
interest rates and make dollar-based assets more attractive.
Midway through the New York session, the dollar was up 0.7
percent at 90.40 yen <JPY=>. The euro was down 0.8 percent at
$1.4860 <EUR=> after touching $1.5049 on trading platform EBS
on Wednesday. Analysts said most of the euro weakness was
technical after it failed to break through resistance.
The dollar index <.DXY>, a gauge of the greenback's
performance against six major currencies, was at 75.611, up 0.6
percent on the day. It was the best one-day performance since
October 26, after touching a fresh 15-month low of 74.774 on
Wednesday.
DOLLAR WEAKNESS
Dollar strength continued to build as the New York session
progressed, though analysts said there was no new fundamental
news to drive the momentum.
"It just looks like continuation of the (dollar) strength"
after the data, said Sacha Tihanyi, currency strategist at
Scotia Capital in Toronto.
Sterling struggled on the back of comments from the Bank of
England on its quantitative easing programme in the previous
session though it was off the session low. Sterling was last
down 0.2 percent at $1.6533. <GBP=>.
But the steady pace of dollar selling in recent weeks -- on
the view U.S. interest rates would remain low for some time --
remained intact analysts said, adding that Thursday's rally was
little more than a consolidation, particularly given events in
Asia.
With the release of the U.S. data, investors now shift
their focus to a meeting of Asia-Pacific nations and other
Asian regional issues, including a U.S. state visit to China
next week.
The latest draft of a post-meeting communique from Asian
Pacific Economic Cooperation leaders called for
"market-oriented" exchange rates and interest rates --
effectively an argument for local currencies to appreciate
against the dollar. []
Some analysts said the focus on Asian currencies was also a
factor capping gains in the euro on Thursday.
Pressure on China and other Asian countries to revalue
their currencies "could take away some of the upside pressure
on the euro," said Marcus Hettinger, currency strategist at
Credit Suisse in Zurich.
U.S. President Barack Obama visits China next week, and
market participants expect currencies to be discussed.
(Reporting by Nick Olivari; Editing by Andrew Hay)
