Title: Dollar wavers as traders await U.S. jobs update

Jun 03, 2022 01:40AM ET

By: AnalysisWatch

The dollar faltered on Friday on its way to its first steady week in three years as traders awaited U.S. jobs data that could hint at how much and how quickly the Federal Reserve could raise interest rates.

Markets had been bracing for the Fed to raise rates back up 50 basis points in June and July, but the dollar has been pushed back and forth this week by uncertainty about what happens after that.

Earlier in the week, the dollar rose on concerns that record high inflation in Europe could be a precursor to sharp interest rate hikes around the world. But on Thursday, it fell and stocks rose as mixed U.S. economic data clouded the outlook.

On Friday, the dollar gave up those losses and settled at $1.0750 per euro, unchanged for the week, and at 129.85 yen, up about 2%.

Asian trading was impacted by holidays in China and Hong Kong, and a public holiday in the UK is expected to ease the situation further, while traders await US labour market data at 8:30 AM ET.

The dollar index was unchanged at 101.76 during Asian trading and is only marginally higher for the week after two consecutive weekly losses of more than 1%.

The yen is being kept under pressure by ultra-low interest rates in Japan and has little chance of following the rest of the world, accounting for its weekly loss.

On Thursday, it was revealed that the number of private sector hires in the United States was lower than expected and that jobless claims surprisingly fell.

Although markets and central banks are currently focused on inflation, the labor market will influence wage expectations and sentiment about the strength of the overall economy.

The sterling was trading at $1.2659. Among cryptocurrencies, bitcoin was around $30,000.