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FOREX-Euro tumbles to 4-year low vs dlr; US data awaited

Published 06/04/2010, 08:19 AM
Updated 06/04/2010, 08:23 AM
EUR/CHF
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EUR/HUF
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* Euro tumbles to $1.2034, lowest in more than four-years

* French PM says unconcerned by euro rate vs dollar

* Euro hits record low vs Swiss franc; SNB said to be absent

(Adds quote, detail)

By Jessica Mortimer

LONDON, June 4 (Reuters) - The euro fell on Friday to a its lowest against the dollar in more than four years after comments by the French Prime Minister on exchange rates.

Investors awaited U.S. non-farm payrolls data at 1230 GMT, which analysts expect to show strong jobs growth.

French Prime Minister Francois Fillon said he was not concerned by the current level of the euro to the dollar.

The comments caused the euro to extend falls that followed a steep drop against the Swiss franc, which traders attributed to an absence of bids from the Swiss National Bank, which has recently intervened to keep the franc from appreciating.

"The SNB was expected to be on the bid at 1.4000 but wasn't," a trader in London said.

Analysts said strong U.S. jobs data could give the dollar a further boost as the market focuses on the relative outperformance of the U.S. economy.

"Going into the jobs report, all the indications are that it will be a strong number and we could see a strong dollar reaction to it," said Audrey Childe-Freeman, currency strategist at Brown Brothers Harriman.

The euro

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The single currency hit a record low against the Swiss franc

Traders said there were stops all the way down to the psychologically important $1.2000 support level.

Below $1.2000, traders say there is little support for the euro before its November 2005 low of $1.1638. The euro's launch level in 1999 at $1.1747 was also a potential key marker.

Traders said concerns about public finances in Hungary also weighed on sentiment towards the single currency as the Hungarian forint fell to a one-year low versus the euro.

They also cited large option structures expiring on the Chicago Mercantile Exchange on Friday around the $1.2200 level, as well as a huge double-no-touch structure with a $1.21-$1.25 range set to expire later in the day.

A daily close under the 50 percent retracement of the 2000-2008 euro rally at $1.2135 would be seen as a bearish signal for the euro, technical analysts said.

JOBS DATA

A Reuters poll forecast 513,000 U.S. jobs were created in May but some in the market are anticipating an even stronger figure following upbeat data this week. [ID:nN02176933]

On Thursday, data showed U.S. private employers added 55,000 jobs in May [ID:nEAP102300] [ID:nN02211844] and on Wednesday President Barack Obama said he expected the non-farm payrolls report to show strong jobs growth.

A robust number would fuel expectations the Federal Reserve will tighten rates ahead of the Bank of Japan, which is tackling deflation, and the European Central Bank. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

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For a graphic showing changes in non-farm payrolls, click

http://r.reuters.com/dyr28k ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

"The euro remains under pressure. Even if U.S. jobs come in weaker than expected, it's likely there will just be a short-term correction to the upside for the single currency," said Antje Praefcke, currency strategist at Commerzbank.

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