FOREX-Aussie whacked as jobs data raise rate cut bets, yen in demand

Reuters

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    * Fading hopes for trade deal, HK protests worry investors
    * Euro edges higher, flirts with $1.13 level
    * Aussie hurt by jobs data and prospect of rate cut
    * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

 (Adds quotes, updates prices)
    By Tommy Wilkes
    LONDON, June 13 (Reuters) - The Australian dollar was the
big loser on Thursday after mixed employment data raised
expectations for an interest rate cut, while investor nerves
about suspected attacks on two oil tankers in the Gulf of Oman
supported demand for the Japanese yen.
    The yen also rallied on Thursday as fading hopes for a
U.S.-China trade deal at this month's G20 meeting, as well as
massive street protests in Hong Kong, drove investors into
safe-haven assets, although stock markets in Europe managed to
claw higher.
    Reports of the attacks on two tankers, which sent crude oil
prices soaring, added to the already-heightened tensions between
Iran and the United States.  urn:newsml:reuters.com:*:nL4N23K1S2
    The yen rose to as high as 108.16 yen per dollar  JPY=EBS 
before settling at 108.44, up 0.1% on the day.
    "You still have a lot of uncertainty when it comes to
geopolitics," said Manuel Oliveri, analyst at Credit Agricole.
    "The focus is shifting to the G20 meeting. Risk sentiment
remains relatively unstable," he added, although cautioning that
expectations for interest rate cuts by the U.S. Federal Reserve
were keeping investor confidence from weakening further.   
    The Australian dollar, viewed as a barometer for global
investor sentiment, fell 0.3% to $0.6901  AUD=D3 , a two-week
low. Against the yen the Aussie tumbled half a percent to its
weakest since January before hitting 74.89  AUDJPY=EBS , down
0.4%. 
    Mixed jobs data in Australia were taken as a green light for
an early rate cut. Analysts noted that markets were pricing in a
65% chance of a rate cut in July, and a more than 80% chance of
one by August and September. Australian government bond yields
slid to record lows.  urn:newsml:reuters.com:*:nL4N23K0W6  
    The dollar edged lower, the index hitting 96.965  .DXY 
after softer-than-expected inflation numbers published on
Wednesday. The greenback hit its lowest since late March on
Monday as expectations grow that the Fed will soon cut rates.
    The euro was little changed at $1.1287  EUR=EBS . 
    "In our view, the Fed has blinked and rate cuts are coming
from July. At the same time, the ECB (European Central Bank)
lacks answers on what to do about the risk of a de-anchoring of
inflation expectations. The Fed-ECB monetary policy divergence
should pave the way for a higher EUR/USD over the coming six
months," Danske Bank analysts said in a note. 
    The Swiss franc rose 0.2% to 1.1215 francs per euro
 EURCHF=EBS  after the Swiss National Bank said it could further
relax its ultra-loose monetary policy but did not sound as
concerned about the economic outlook as some analysts had
expected.  urn:newsml:reuters.com:*:nL8N23K1O0 
    Sterling slipped, extending Wednesday's losses after British
lawmakers defeated an attempt led by the opposition Labour Party
to try to block a no-deal Brexit.  urn:newsml:reuters.com:*:nL8N23J56G
    The pound was last down 0.1% at $1.2675  GBP=D3  and 89.06
pence per euro  EURGBP=D3 .

 (Additional reporting by Shinichi Saoshiro in Tokyo
Editing by Mark Heinrich)
 ((thomas.wilkes@thomsonreuters.com))

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