(Corrects to make clear the biggest fall in the U.S. dollar in six weeks was on Friday not Monday. A previous FOREX report with USN [nSGE60A03L] issued at 0347 GMT also carried the same error)
* Dollar down post U.S. jobs report, China export data
* Stop-losses triggered in thin market, euro above $1.45
* Fed's Bullard says rates to stay low, job losses to slow
* Aussie rallies on Chinese and local data, gold
By Anirban Nag and Vidya Ranganathan
SYDNEY/SINGAPORE, Jan 11 (Reuters) - The U.S. dollar dropped afresh on Monday, after suffering its biggest fall in six weeks in the wake of disappointing U.S. jobs data, while the Australian dollar soared on the back of strong export numbers from China.
The euro
It pierced the $1.4500 barrier after St. Louis Federal Reserve President James Bullard said U.S. interest rates may remain low for some time [ID:nN10135532].
The next big resistance is now seen around $1.4570 and a break of that would suggest a gradual recovery towards $1.4800, traders say.
"Expectations that the Federal Reserve will keep rates on hold for the foreseeable future, encouraged by Friday's weak employment report have held the dollar down," said Joseph Capurso, a strategist at Commonwealth Bank.
The dollar index <.DXY> was down 0.69 percent at 76.93, having risen to as high as 78.187 on Friday.
Latest data from the Commodity Futures Trading Commission showed speculators cut U.S. dollar long positions in the week to Jan 5, and traders say hat trend is likely to pick up. [IMM/FX].
Trading was thin with Tokyo shut for a holiday, encouraging some players to trigger stop-loss selling of the U.S. currency.
Traders expect the greenback to stay on the defensive as speculators cut long positions in the U.S. dollar following the U.S. jobs report.
Data on Friday showed U.S. employers cut 85,000 jobs last month. November payrolls, however, were revised to show the economy actually added 4,000 jobs. [ID:nN0747110].
Interest rate futures <0#FF:> pared expectations the Fed will
raise benchmark short-term rates any time soon. July futures
contract
"The dollar's reaction soon after the soft employment data would suggest that traditional economic relationships i.e. soft data, weaker currency and vice versa, are starting to become a dominant theme again at the cost of last year's risk on/risk off theme," RBC Capital Markets said in a note to clients.
"This could partially explain the whippy trading on Friday.
"Over the medium-term, however, the risk on/risk off theme is expected to continue to fade with FX focus returning more to economic releases and the implication for monetary policy rather than blindly following global risk sentiment."
EARNINGS THE NEXT LITMUS TEST
The U.S. dollar's next litmus test is expected to be the U.S. earnings season which kicks off in earnest this week, U.S. retail sales, industrial production and inflation data. [ID:nN10128337]
"The new year is beginning with a gradual unwind of December's dollar rally, as the notion of early Fed tightening is put to rest," JPMorgan said in a report. "Ahead of earnings season, add to U.S. dollar shorts versus commodity currencies and also buy yen crosses."
Still, traders suspected the euro will have difficulty rising past the $1.4570 resistance, given the jobs situation in the euro zone is no better than in the United States -- it was at an 11-year high in November.
The European Central Bank will meet on Thursday and is expected to keep rates unchanged.
Jitters about more sovereign debt downgrades could keep a leash on the euro. The Financial Times reported on Monday that Portugal has been warned about a threat to its ratings. [ID:nLDE6090O4].
That is likely to compound worries already caused by Greece's credit battle and Iceland's row with the Netherlands and Britain over its banking collapse.
The Australian dollar rallied to a 26-month high versus the euro
The Aussie was also bolstered by a rise in gold prices. Spot gold
Against the yen, the Aussie hit a 15-month high above 86 yen
The yen
On Friday, the yen recovered some ground after Japan's new finance minister backed off from his earlier call for a weaker yen following a rebuke from the prime minister. (Editing by Jan Dahinten)