FOREX-Dollar weakens after data shows US wage gains were modest

    * Annualized wage growth dropped in September
    * Bond market closed on Monda for Columbus Day

 (New throughout, updates prices, market activity and comments
to U.S. market open, new byline, changes dateline, previous
LONDON)
    By Karen Brettell
    NEW YORK, Oct 5 (Reuters) - The U.S. dollar weakened in
choppy trading on Friday after data for September showed jobs
gains that fell short of expectations while wages increases
slowed on an annualized basis during the month, easing concerns
about a large run-up in inflation.
    Nonfarm payrolls increased by 134,000 jobs last month, the
fewest in a year, though data for July and August was revised to
show 87,000 more jobs added than previously reported.
    Average hourly earnings increased eight cents, or 0.3
percent, in September after rising 0.3 percent in the prior
month. With September's increase below the 0.5 percent gain
notched during the same period last year, that lowered the
annual increase in wages to 2.8 percent from 2.9 percent in
August, which was the biggest rise in more than nine years.
    “Wage inflation is creeping higher, but it has not
accelerated as the market was fearing,” said Russell Price,
senior economist at Ameriprise Financial Services in Troy,
Michigan.
    Investors have been watching for indications that wages may
rise at a faster pace as companies, including Amazon,
raise minimum wages.
    The dollar reversed direction several times before settling
at lower levels after the data. The dollar index fell to
95.645, from around 95.770 before the data.
    Hawkish Federal Reserve speakers and strong U.S. economic
growth have supported the greenback in recent weeks. A dramatic
surge in Treasury yields this week that may attract investors
seeking higher returns is also seen as positive for the U.S.
currency.
    “Certainly these higher yields are giving a better bid to
the U.S. dollar across the board,” said Dean Popplewell, chief
currency strategist at Oanda in Toronto.
    Given recent strength, investors are also likely to be
cautious about being short the U.S. currency before a long
weekend, Popplewell said, adding that “there is good demand for
U.S. dollars definitely on pullbacks.”
    The U.S. bond market will be closed on Monday for the
Columbus Day holiday though stock markets are open.
    
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    Currency bid prices at 9:38AM (1338 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1524        $1.1513     +0.10%         -3.93%      +1.1538     +1.1485
 Dollar/Yen       JPY=        113.8600       113.9000    -0.04%         +1.06%      +114.0900   +113.7600
 Euro/Yen         EURJPY=     131.25         131.15      +0.08%         -2.91%      +131.3500   +130.8100
 Dollar/Swiss     CHF=        0.9922         0.9916      +0.06%         +1.84%      +0.9955     +0.9915
 Sterling/Dollar  GBP=        1.3085         1.3018      +0.51%         -3.16%      +1.3100     +1.3004
 Dollar/Canadian  CAD=        1.2926         1.2923      +0.02%         +2.77%      +1.2954     +1.2895
 Australian/Doll  AUD=        0.7077         0.7072      +0.07%         -9.28%      +0.7086     +0.7053
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1435         1.1417      +0.16%         -2.17%      +1.1446     +1.1415
 Euro/Sterling    EURGBP=     0.8805         0.8841      -0.41%         -0.88%      +0.8848     +0.8805
 NZ               NZD=        0.6470         0.6478      -0.12%         -8.71%      +0.6485     +0.6451
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.2506         8.2474      +0.04%         +0.53%      +8.2897     +8.2381
 Euro/Norway      EURNOK=     9.5104         9.4987      +0.12%         -3.43%      +9.5277     +9.4850
 Dollar/Sweden    SEK=        9.0626         9.0577      +0.14%         +10.50%     +9.1003     +9.0485
 Euro/Sweden      EURSEK=     10.4457        10.4314     +0.14%         +6.17%      +10.4590    +10.4190

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