Dollar Holds Steady as Traders Eye Nonfarm Payrolls and Hormuz Risk

The US dollar has held steady against major peers on Friday as traders prepared for the release of the Nonfarm Payrolls report. The greenback's resilience reflects a combination of factors, including expectations for the upcoming jobs data and safe-haven demand stemming from heightened tensions around a key oil shipping route.

Investors are closely watching the Nonfarm Payrolls figure, which is due at 8:30 AM ET, as it could provide insight into the health of the US labor market. A strong reading could reinforce the Federal Reserve's higher-for-longer interest rate stance, while a weak number might revive bets on earlier rate cuts.

The situation in the Strait of Hormuz has also added to the uncertainty in currency markets, with reports of increased military activity near the critical oil chokepoint rekindling concerns about potential supply disruptions. The strait handles roughly a fifth of global oil consumption, and any threat to its security typically triggers risk-off flows into the dollar, yen, and Swiss franc.