By Peter Nurse
Investing.com – The U.S. dollar edged lower in early European trade Friday ahead of the key monthly jobs report, and the yen weakened after the Bank of Japan retained its ultra-dovish stance.
At 03:00 ET (08:00 GMT), the
Dollar Index
, which tracks the greenback against a basket of six other currencies, traded 0.2% lower at 105.125, but was on track for a weekly gain of 0.7%.
The dollar has handed back some of the week’s strong gains after the weekly
jobless claims
data, released on Thursday, showed that the number of Americans filing new claims for unemployment benefits increased by the most in five months.
However, losses are minor as traders await the release of the widely-watched monthly
payrolls report
later in the session. This was an economic release that Federal Reserve Chair
Jerome Powell
specifically mentioned earlier this week as influencing the thinking of the central bank policymakers as far as further
interest rate
hikes are concerned.
Nonfarm payrolls are expected to have increased by 205,000 jobs last month, a slowdown from the blockbuster 517,000 added in January, but the possibility of another upside surprise exists, especially after Powell’s hawkish tone in his semi-annual testimony to Congress.
Elsewhere,
USD/JPY
rose 0.2% to 136.32 after the
Bank of Japan
held interest rates at record lows earlier Friday, and said it will continue with its very soft monetary policy in the last meeting with Governor Haruhiko Kuroda in control.
Kazuo Ueda is set to take over the leadership of the central bank, and has signaled that he will maintain the BOJ’s ultra-dovish stance, at least in the near term.
EUR/USD
rose 0.2% to 1.0602 after German consumer prices, harmonized to compare with other European Union countries, rose by 9.3% on the year in February, up 1.0% on the month.
Although these numbers confirm the preliminary data, they illustrate the difficulties the
European Central Bank
will have bringing inflation in the Eurozone back down to its medium-term target of 2.0%.
GBP/USD
rose 0.2% to 1.1947 after data released earlier Friday showed that U.K.
gross domestic product
rose by 0.3% month-on-month in January, above the expected 0.1%.
Signs the British economy is proving somewhat resilient could help the
Bank of England
to decide to raise interest rates again this month.
AUD/USD
rose 0.2% to 0.6600,
NZD/USD
rose 0.2% to 0.6114 and
USD/CNY
edged higher to 6.9660.
USD/TRY
rose 0.1% to 18.9678, with the Turkish lira near a record low against the dollar following last month’s massive earthquakes and as the country continues the unorthodox monetary policies under President Tayyip Erdogan.
The lira lost some 30% of its value against the dollar in 2022 and 44% the year before.
