LONDON: The dollar steadied against the euro and yen on Friday after a week of gains as the market braced for U.S. non-farm payrolls data that could spur the Federal Reserve to raise interest rates in September.
The euro treaded water at $1.0915 EUR= after edging further away from a two-week trough of $1.0847 plumbed mid-week. The common currency has lost 0.6 percent versus the dollar this week.
The greenback stood little changed at 124.78 yen JPY= following a retreat overnight caused by position adjustments before the U.S. payrolls release at 1230 GMT Friday. ECONUS
The dollar was still poised to gain about 0.7 percent on the week after touching a two-month high of 125.015 on Wednesday.
Upbeat U.S. economic indicators that supported the case for tightening and hawkish comments by a Fed official helped the dollar scale that peak.
But Friday’s payrolls report is expected to play a more crucial part in shaping the “data dependent” Fed approach to raising rates.
Economists expect the payrolls report to show that 223,000 jobs were created in July.
“Whether the dollar can advance further against the yen will likely depend on how equities react to payrolls that could support a September hike,” said Shusuke Yamada, chief Japan FX strategist at Bank of America Merrill Lynch in Tokyo. “Lower equities would weigh on the dollar, but we still see the currency on an uptrend in the medium term.”
