The US dollar weakened against major currencies on Friday as investors awaited the release of the monthly nonfarm payrolls report. The dollar index, which measures the greenback against a basket of six major currencies, dropped 0.2% to 92.123.
Market participants are closely monitoring the US labor market data for insights into the economic recovery and potential policy changes by the Federal Reserve. Economists expect the report to show a gain of 720,000 jobs in August, which could influence the central bank's timeline for tapering its asset purchases.
Amidst the anticipation of the payrolls data, the euro gained 0.2% against the dollar to $1.1877, while the Japanese yen strengthened by 0.1% to 109.89 per dollar. The British pound also rose by 0.2% to $1.3872.
Investors are also keeping an eye on the ongoing developments surrounding the Delta variant of COVID-19 and its potential impact on global economic growth. Concerns about the variant have led to increased volatility in financial markets in recent weeks.
Meanwhile, the Australian dollar climbed 0.3% to $0.7471, supported by rising commodity prices and strong economic data from China. The Canadian dollar also advanced by 0.2% to C$1.2625 against the greenback.
In the cryptocurrency market, Bitcoin edged up 0.1% to $49,115, while Ethereum rose 0.5% to $3,570. Both digital assets have seen increased interest from institutional investors and retail traders in recent months.
Overall, the currency markets are bracing for potential volatility following the release of the US nonfarm payrolls report, which could provide crucial insights into the state of the world's largest economy and influence trading dynamics in the coming weeks.
