Euro rises vs dollar on U.S. employment report expected

The euro rose against the dollar Friday in a small volume, pending the report on the state of the U.S. labor market, while the yen fell after sources said the Bank of Japan may consider more monetary easing measures.

The data on U.S. payrolls, which will be published at 1330 GMT, give clues about the pace of economic recovery, although bad weather in February could affect the numbers.
The consensus of analysts polled by Reuters was for a loss of 50,000 jobs in February.

Analysts believe that a figure better than expected boost to the dollar, while a worse than expected could be dismissed as the effect of the snowstorms, which would limit any adverse impact on the currency.
"The market is looking for signs of impending cyclical upturn in the U.S. and a number on the payroll could point to that," said Peter Wuyts, analyst at KBC in Brussels.

"But the climate is difficult to predict the numbers do not surprise me to market uncertainty following the release, implying that the current pattern of consolidation in the euro / dollar would continue into next week," he added.
In London, the euro was up 0.1 percent against the dollar at $ 1.3588, in a small volume before the employment report, while the dollar index was steady at 80.547.

Wuyts KBC said the strengthening of the euro over a minimum of nine months and through $ 1.3432, reached this week, suggests that the market has now absorbed most of the bad news coming from Greece.

Athens sold on Thursday with a high demand a 10-year bond, a day after he announced new austerity measures.

However, concern still awaiting a meeting between Greek Prime Minister George Papandreou, and German Chancellor Angela Merkel.Meanwhile, the yen fell after sources said the Japanese central bank would discuss this month a new flexibility in its monetary policy amid government pressure to exit deflation.

"Statements on the Bank of Japan should have an impact on the yen and believe that the dollar / yen will be around 90.30 yen in the next couple of days," said Carl Hammer, a strategist at SEB in Stockholm.
The euro rose 0.3 percent to 121.36 yen while the dollar appreciated to 89.31 percent as yen, recovering from a three-month low of 88.14 yen reached the previous day.