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Dollar hugs ranges in Europe

Dollar sideled within ranges in Europe

LONDON: The dollar sidled within familiar ranges all through the European session, but analysts said gains were merely on hold ahead of Friday's key U.S. March payrolls data and the long Easter weekend.

The U.S. currency's inability to build on Monday's push to 26-month highs against the yen has created mild disappointment, but analysts saw precious little to give it the required shove.

"As far as fundamentals are concerned, the market is in dire need of fresh incentives," said Eric Fishwick, senior analyst at IBJ International in London. "There was no data released of current interest today, and it'll remain so until the payrolls."

U.S. figures issued today left the market cold. The Index of Leading Indicators posted its heftiest rise in 20 years in February, increasing 1.3 percent after falling 0.5 in January. Economists had expected on average a 1.1 percent rise.

Gross Domestic Product, however, painted a less encouraging picture, with the fourth-quarter figure revised down to a final 0.5 percent from an initial estimate of 0.9 percent -- representing just a fraction of the third quarter's 3.6 percent.

The dollar was quoted at 107.35/45 yen by 1450 GMT, barely changed from late Monday's European level of 107.40/47 and below the 26-month high hit yesterday of 107.68.

It traded at 1.4820/25 marks, unchanged from yesterday's close here.

After February's shock 705,000 rise in U.S. non-farm payrolls sent stock and bond markets into a tailspin, players are positioning themselves as flat as pancakes ahead of Friday.

"We've learned from hard experience that you go into these sorts of figures in a minimum-risk position, and it's that sort of sentiment that's prevalent at present," said IBJ's Fishwick.

The market expects a modest 80,000 rise in payrolls, though analysts say the volatility of recent jobless claims data means the number could even be negative.

But with nerves still rife over the Japanese banking system -- stoked by the news last week of the liquidation of Taiheiyo Bank -- there is plenty to boost the dollar once Easter is over and payrolls are out of the way, traders and analysts said.

Hopes that the new fiscal year will spur Japanese flows into U.S. assets are also supportive, although economists warn against expecting a tidal wave of fresh funds.

Chartists pitch support for dollar/yen between 107.20 and 106.90, and see this holding for a rebound towards 108.50.

Dollar/mark is expected to stick above 1.4770 for a fresh test of resistance at 1.4860.

A break of that upside level will set up a target of 1.4920 marks, analysts say.

Elsewhere, the mark was steady, shrugging off the conclusion of the Group of Seven summit on jobs in Lille, France. The concluding statement focused mainly on control of public spending and the reduction of deficits to foster job creation, as well as reaffirming G7 commitment to open trading policies.-Reuter