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Greenback ends mixed

NEW YORK: The dollar on Friday ended little changed on the mark and slightly higher against the yen in the US, retaining a bid tone from overnight.

The main event for the market in the US session was a report from the Labor Department that offered mixed signals about the economy. It showed unexpectedly modest growth of 55,000 in American nonfarm payrolls in July, a number that many traders described as "disappointing."

The US unit initially sold off on the number but rebounded as players determined there were some signs of economic strength in the report.

Most notably, the government upwardly revised June payrolls growth, which came in a 250,000 after it was originally reported at 215,000.

"I think the numbers look a lot weaker than they are," said Lizbeth Goldberg, a dealer at Hypobank, who added that the two-month average of the numbers was a sturdy 150,000.

The dollar closed in the US at 91.35/45 yen, up slightly from the opening at 91.19/26 yen. It was virtually unchanged at 1.3967/77 marks from 1.3970/80 marks at the open.

The dollar rose overnight after remarks from a Bundesbank official fuelled expectations for German interest rate cuts.

Johann Wilhelm Gaddum, vice president at Germany's Bundesbank, hinted that the central bank would allow the securities repurchase rate to fall slightly at the next tender at the middle of next week.

He said a slight move down in the repo rate, however, would not be a signal of a cut in the discount rate.

Still, speculation of such a development arose in the market. "The market is looking for a quarter-point cut in the discount rate," said Peggy Reed, vice president at Credit Agricole.

"If we don't get that next week, I think the market will be disappointed," Reed said.

Traders are focusing on next week's meeting of the Bundesbank's policy-making council as a rate-cutting opportunity since it is the council's first meeting following its month-long recess.

In addition to the rate cut speculation, the dollar was also riding a wave of optimism generated when US and Japanese monetary authorities took steps to try to lift it against the yen on Wednesday.

Reed said dealers have observed signs of strong underlying interest to buy dollars in the aftermath of those developments.

"The market is beginning to fell that maybe the dollar has bottomed out here and will start to rally," Reed said.

At the close, the dollar was at 1.1520/30 Swiss francs versus the opening at 1.1553/60 Swiss. It was at Canadian $1.3582/87 from C$1.3563/68. Sterling rose to $1.6050/60 from $1.6023/30. The Australian dollar closed at $0.7427/32.

At midday, the Morgan Guaranty trade-weighted index stood at 90.8 percent of its 1990 trade-weighted value.-Reuter