Dollar falters before US jobs data

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London (AFP) – The dollar fell to a six-month low against the euro Friday awaiting the release of key US jobs data.

Europe’s main stock markets were downbeat as traders reacted to mixed company updates and looked ahead to France’s presidential election on Sunday.

Oil prices steadied after sliding on renewed supply glut concerns.

The European single currency reached $1.0990 in Asian trading, the highest level since early November, but subsequently fell back.

While traders look ahead to the release Friday of crucial US jobs data, the collapse in crude prices has dented optimism on trading floors, with analysts warning about the possible effects on the economy.

Both main oil contracts tumbled by about two percent in Asia deals — following losses of almost five percent on Thursday — to record five-month low points.

Economic strains in China, an expected hike in US interest rates — which could make dollar-denominated oil more expensive to holders of other currencies — and signs of slowing crude demand have contributed to the dive.

Shares in Asian oil companies had lost up to three percent in value by the close on Friday. 

“Crude oil has suffered significantly overnight, with global benchmark Brent crude falling below $50 a barrel and its US counterpart below $45 for the first time since November’s OPEC production cut agreement,” said Accendo Markets analyst Mike van Dulken. 

There were also “rising concerns” that OPEC members and non-members might not extend the deal later this month, the expert said.

  • Possible US rate hikes? –

The US jobs figures for April meanwhile will be closely watched for clues about the Federal Reserve’s plans for hiking interest rates.

The central bank is expected to lift borrowing costs next month but with oil price weakness returning, in turn reducing inflation concerns, policymakers could be more reticent.

In Europe, the pound won support Friday as it emerged the ruling Conservative Party was set for a big win in local polls, just a month ahead of a general election. 

Across the Channel, French centrist Emmanuel Macron sought to cement his frontrunner status on the last day of campaigning for the weekend’s election run-off after a bruising and divisive race.

Pro-European Macron and far-right anti-immigration candidate Marine Le Pen have offered starkly different visions for France during a campaign that has been closely watched around the world.

“Sunday’s French election has and will continue to drive investor sentiment throughout Europe, with the prospect of pro-EU Macron pushing for stability rather than the upheaval of Le Pen,” said Joshua Mahony, market analyst at IG trading group. 

On the corporate front Friday, British publisher Pearson sent its share price rocketing after the group launched a new cost-cutting plan and put its US schoolbooks division up for sale.

In late morning trade, Pearson shares soared 13.75 percent to 748.50 pence on London’s FTSE 100 index, which was almost flat.

Pearson, which has issued a series of profit warnings in recent years, will seek to slash costs by £300 million ($387 million, 354 million euros) on an annualised basis by the end of 2019.

  • Key figures around 1030 GMT – 

London – FTSE 100: FLAT at 7,248.83 points

Frankfurt – DAX 30: DOWN 0.4 percent at 12,597.12

Paris – CAC 40: DOWN 0.1 percent at 5,368.26

EURO STOXX 50: DOWN 0.3 percent at 3,618.19

Hong Kong – Hang Seng: DOWN 0.8 percent at 24,476.35 (close)

Shanghai – Composite: DOWN 0.8 percent at 3,103.04 (close)

Tokyo – Nikkei 225: Closed for holiday

New York – Dow: FLAT at 20,951.47 (close)

Euro/dollar: DOWN at $1.0959 from $1.0983 at 2100 GMT

Pound/dollar: UP at $1.2941 from $1.2923 

Dollar/yen: DOWN at 112.31 yen from 112.39 yen

Oil – Brent North Sea: UP 11 cents at $48.49 per barrel

Oil – West Texas Intermediate: FLAT at $45.52 

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    <figure><figcaption>Increased production in the US, Nigeria and Libya as well as concerns about OPEC's commitment to extending a production cut has hammered oil prices and the shares of energy firms
        <span>Copyright Getty Images North America/AFP DAVID MCNEW</span>
      </figcaption></figure>