Dollar Edges Higher as Markets Await Iran Deal News and US Payrolls
The US dollar ticked up on Thursday as investors awaited more details on a proposed US-Iran deal and looked ahead to Friday's US jobs report. The dollar index, which tracks the US currency against six major peers, was up 0.1% at 99.77.
Despite some intervention-led gains, the Japanese yen retreated to 157.85 per dollar following modest declines over the past two sessions. It has now given back some of its intervention-driven gains after touching 155.20 per dollar on Monday.
Jonas Goltermann, chief markets economist at Capital Economics, said that stretched positioning, US involvement, and the yen's historical undervaluation all suggest that the current round of intervention may be more effective than previous ones.
The euro was down about 0.1% at $1.1542, while sterling fell a similar amount to $1.3460. Brent crude inched higher to around $80.20 a barrel, although prices remain well below the almost $100 per barrel hit in July when US-Iran tensions flared.
US President Donald Trump has said a deal to reopen the Strait of Hormuz is imminent, but US officials have repeatedly insisted they would never agree to Iran controlling access to the world's most important trade route for energy supplies. The proposed deal between Iran and Oman could give Teheran control over inbound traffic through the strait.
Investors are now turning their focus to US payroll data that could provide more clues on the Federal Reserve's interest rate path, after data showed the country's services sector stayed strong in July while services-sector employment slowed. A Reuters survey of economists expected July's employment report to show non-farm payrolls increased by 80,000 jobs in July after rising 57,000 in June.
Fed Governor Lisa Cook said she was open to raising short-term interest rates to deal with 'too-high' levels of inflation in the US economy. San Francisco Fed President Mary Daly said she was 'completely supportive' of last week's decision to hold rates steady and said more data is needed before September's meeting.