* Dollar index slips, at one-week low
* Sterling up 0.2% vs dollar
* Offshore yuan near 10-week highs
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
LONDON, May 7 (Reuters) - The dollar was stuck around a
one-week low on Friday, under pressure ahead of U.S. jobs data
that is expected to underpin hopes for a strong post-pandemic
economic recovery and to increase investor risk appetite.
Against a basket of major currencies, the dollar index was
at 90.841, down less than 0.1% on the day at 0728 GMT =USD . It
was on track for a loss of around 0.5% on the week overall,
having seen its worst day in nearly two weeks on Thursday.
U.S. payrolls data is due at 1230 GMT and is expected to
show that employers hired nearly a million workers in April, as
they rushed to meet a surge in demand unleashed by the reopening
of the economy and massive financial help from the government.
In the previous session, a larger-than-expected fall in
jobless claims saw stocks rise and the dollar fall, suggesting
that the dollar is acting as a safe-haven currency, hurt by
improving risk appetite. But if improving economic data stokes inflation worries and
leads to expectations that the Federal Reserve will reduce
monetary stimulus, that could boost U.S. yields and the dollar.
Commerzbank strategist You-Na Park-Heger said that the
dollar could benefit in the short-term from the data.
"A good result brings the U.S. central bank's target
closer," she wrote in a note to clients.
"However, today's data is unlikely to have any direct
significance for the Fed as it will require a lot of more good
data yet to get the Fed to take action. As a result, the labour
market report is unlikely to be trendsetting for EUR-USD."
At 0729 GMT, the euro was up 0.1% on the day at $1.207
EUR=EBS .
UK ECONOMY
The British pound was a touch stronger against the dollar at
$1.3911 GBP=D3 and steady against the euro at 86.79 pence per
euro EURGBP=D3 .
The Bank of England said on Thursday that Britain's economy
would grow by the most since World War Two this year and slowed
the pace of its trillion dollar bond-purchasing programme, but
stressed it was not reversing its stimulus. Just over a third of the results of the Scottish
parliamentary election will be announced on Friday and the
remainder will be announced on Saturday.
China's exports unexpectedly accelerated in April and import
growth hit a decade high, helping to push the yuan and Asian
stocks higher. China's yuan was at a more than two-month high versus the
dollar, set for its longest weekly winning streak since
September, helped by the strong trade data and softer dollar.
The Australian dollar was down 0.3% versus the U.S. dollar,
at 0.77645 AUD=D3 , while the New Zealand dollar was down 0.4%
at 0.72125 NZD=D3 .
The Aussie has been supported by a strong rally in the
prices of Australia's top export earner, iron ore. The Reserve Bank of Australia (RBA) upgraded forecasts for
the country's economy, though inflation and wages growth are
seen lagging in a sign that monetary policy will remain highly
accommodative for years to come. "We expect the likes of AUD, CAD and NOK to remain well
supported with the backdrop for positive optimism over global
growth still quite favourable," wrote MUFG head of research
Derek Halpenny in a note.
The Canadian dollar was down 0.2%, having surged on Thursday
to its strongest in more than three years against the U.S.
dollar CAD=D3 . "There could be some profit-taking on today's Canadian
employment data, which is expected to be bad," Marshall Gittler,
head of investment research at BDSwiss Group, said in a note.
Elsewhere, the cryptocurrency ether was steady, having hit a
new all-time high on Thursday ETH=BTSP . Bitcoin was little changed, at around $56,000 BTC=BTSP .
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