Dollar set for weekly loss as crucial US jobs data looms
dollar was on course to snap a six-week winning streak against major peers on Friday, as it headed into a pivotal monthly U.S. jobs report that is likely to inform the path for Federal Reserve policy over coming months.
The U.S.
currency dipped to a one-week low against the yen, weighed down by slumping Treasury yields, after a volatile week when overall soft economic data tempered the outlook for further Fed rate hikes.
However, the greenback held on to gains made against the euro and sterling overnight after policymakers at the respective central banks struck more dovish postures ahead of policy meetings this month.
Elsewhere, the Chinese yuan strengthened after the nation's central bank cut forex reserve requirements for the first time in a year.
The U.S. dollar index — which measures the currency against a basket of six developed-market peers, including the euro, sterling and yen — edged 0.05% lower to 103.58 on Friday, bringing declines this week to 0.53%.
A parade of employment and inflation data has paved the way to the nonfarm payrolls report later in the global day, and much of it has been on the weaker side, leading traders to pare bets for a rate hike on Sept.
20 to 12% from 18% a week ago, according to the CME Group's FedWatch tool.
Two-year Treasury yields, which are particularly sensitive to rate expectations, have declined about 20 basis points this week to 4.86%, the biggest slide since mid-March.
That has helped push the dollar down against the yen. It slipped 0.08% to 145.405 yen on Friday, putting its loss for the week at 0.7%.
The dollar made up some ground on the euro overnight though.
