Dollar Set for Weekly Gains as Markets Await Iran Talks and US Jobs Data
The US dollar was little changed on Friday ahead of the release of July US non-farm payrolls data, but it remained on track to post weekly gains against major currencies, as uncertainty over reaching an agreement with Ir
Translated by Qiyas from الجريدة — Original source
The US dollar was little changed on Friday ahead of the release of July US non-farm payrolls data, but it remained on track to post weekly gains against major currencies, as uncertainty over reaching an agreement with Iran bolstered the appeal of the US currency as a safe-haven asset.
The closely watched US monthly jobs report could provide further clues about the Federal Reserve’s interest rate trajectory, as markets assess the likelihood of rate hikes.
Reuters polling of economists forecasts that US non-farm payrolls increased by 80,000 last month, following a rise of 57,000 in June. The unemployment rate is expected to hold steady at 4.2%.
The dollar index, which measures the performance of the US currency against six major currencies including the euro, yen, and British pound, rose slightly to 99.975 points, posting gains of 0.17% since the start of the week, after declining 1.6% in the previous week.
The dollar stabilized at 158.43 against the yen, after rising 0.4% on Thursday. This maintained the dollar-yen exchange rate on track for weekly gains of nearly 0.5%, following a recovery from the impact of joint US-Japanese intervention that had pushed it down from a level above 163 yen per dollar—the highest in about four decades—to a 13-week low of 155.20 yen on Monday.
Christina Cleighton, an economist at the Commonwealth Bank of Australia, said the dollar was supported by rising oil prices following news that a deal between the United States and Iran to reopen the Strait of Hormuz had become less likely than previously hoped. She and other analysts also pointed to a Financial Times report citing sources close to Federal Reserve Chair Jerome Powell, suggesting that interest rates could be raised in September depending on upcoming data, but Cleighton added, “We expect the Federal Reserve to wait until December before beginning a moderate tightening cycle.”
The US central bank, which is experiencing divergent views among policymakers, kept interest rates unchanged last month, but Powell stated he remains committed to reducing inflation.
