Euro turns lower in New York

The euro fell on Thursday against the US dollar as traders pocketed profits from the shared currency's biggest two-day gain in six years and German Bund yields slipped from multi-month highs. Traders trimmed euro positions as a precaution ahead of the US Labor Department's monthly non-farm payrolls report due Friday. "Markets are trying to be a little cautious ahead of the NFP number tomorrow, so we're seeing profit-taking in the euro ahead of that," said Sireen Harajli, a foreign exchange strategist at Mizuho Corporate Bank in New York.
The euro last traded down 0.3 percent against the dollar at $1.12410, as German 10-year Bund yields, fell to 0.83 percent from a session peak of about 1 percent, their highest since late September 2014. Bond yields move inversely to prices. Early in the session, the euro hit $1.13800, its highest level against the greenback in two and a half weeks.
The rise in Bund yields drove investment flows into the euro, forcing traders who had bet against or "shorted" the euro to cover their bets, analysts have said. Analysts said the decline in Bund yields Thursday occurred on investors' view that the sell-off may have gone too far. Friday's US jobs data, which economists polled by Reuters expect will show US employers added 225,000 jobs in May, could boost expectations that the Federal Reserve will hike rates in September. Analysts said expectations of a September rate hike would lift the dollar.
"A really good report would put everybody back in the September camp, and it would probably lead to a percent upside for the dollar broadly," said Greg Anderson, global head of FX strategy at BMO Capital Markets in New York. Concerns about Greece also weighed on the euro. Greece delayed a key debt payment to the International Monetary Fund due on Friday as Prime Minister Alexis Tsipras, facing fury among his leftist supporters, demanded changes to tough terms from international creditors for aid to stave off bankruptcy.
"If they were really close to a deal, Greece would not be postponing that payment," Anderson of BMO said. The dollar was last up 0.06 percent against the yen at 124.320 yen. The dollar was last down 0.13 percent against the Swiss franc at 0.93250 franc. The dollar index, which measures the greenback against a basket of six major currencies, was mostly flat at 95.443.