U.S. Dollar Near One-Week Low as Job Market Indicators Send Mixed Signals
By Kevin Buckland
TOKYO - The U.S. dollar is hovering near a one-week low against major peers on Friday as job market indicators send mixed signals ahead of crucial monthly payrolls data that will likely dictate Federal Reserve policy easing.
The Dollar Index, which measures the currency against a basket of six key counterparts, held steady at 101.03 as of 0015 GMT, after slipping about 0.2% overnight and touching 100.96 for the first time since Aug. 29. For the week, it has dropped close to 0.7%.
A report on Thursday showed a decline in new jobless benefit applications, easing concerns about a rapidly deteriorating labor market. However, private jobs growth slumped to a 3-1/2-year low in August, adding to the uncertainty.
Traders are now waiting for Friday's payrolls print, with economists predicting an increase of 165,000 jobs in August, up from a 114,000 rise in July.
Market watchers are closely monitoring the Fed's response, with a 40% chance of a 50-basis point Fed interest rate cut on Sept. 18, according to the CME Group's FedWatch Tool. Fed Chair Jerome Powell has signaled a focus on preventing job market deterioration.
Analysts expect a quarter-point cut this month, which could trigger a dollar rebound as the currency is already weighed down by negative sentiment.
The dollar was steady against the yen and the euro, while sterling held firm. The risk-sensitive Australian dollar edged down slightly, and bitcoin attempted to recover from a recent low.
Analysis: The U.S. dollar is under pressure as job market indicators send mixed signals, leading to uncertainty about the Fed's next move. A potential interest rate cut could impact the currency and financial markets. Traders should closely watch the upcoming payrolls data and Fed announcements for clues on future policy decisions.