The dollar neared a one-week high Friday, following a sharp drop in U.S. jobless claims, easing recession concerns.
China’s yuan rose after stronger-than-expected inflation and a firmer official exchange rate fixing.
The U.S. dollar remained steady against the yen after a three-day rebound, bolstered by rising Treasury yields and strong employment data.
The yen and Swiss franc held near one-week lows as Asian stocks rose, while riskier currencies like the Australian dollar remained strong.
Markets faced a turbulent week due to unexpectedly weak U.S. payrolls, driving global stocks down and safe-haven currencies up.
The dollar slipped 0.1% to 147.08 yen, yet remains on track for a 0.4% weekly gain despite Monday’s 1.5% drop.
It fell 0.1% to 0.8659 franc, on track for a 1% weekly increase.
State unemployment claims fell by 17,000 to 233,000 last week, beating Reuters’ forecast of 240,000, marking the largest drop in 11 months.
The Fed’s 50-basis-point rate cut odds dropped to 54% from 69%, while a 25-point cut rose to 46%, per CME FedWatch.
“Despite the volatility in claims data, especially around this time of year, the data helped allay fears of a more rapid deterioration in the labour market,” said Taylor Nugent, senior markets economist at National Australia Bank.
The outsized Wall Street rally, which spurred the flight from the yen and Swiss franc, was “an unusual reaction to a such a volatile weekly print … underscoring the market’s sensitivity to labour market indicators after Friday’s soft payrolls,” he said.
Yen Strengthens on BOJ Rate Hike; Mixed Currency Movements and Bitcoin Surges
The yen surged this month to 141.675 per dollar due to a surprise BOJ rate hike and weak U.S. indicators.
Later on Friday, Commodity Futures Trading Commission figures will clarify if the unwinding has concluded.
The dollar index, measuring against major currencies, fell 0.1% to 103.17 after three days of gains.
It briefly hit 103.54 overnight, the highest since Aug. 2, but then stabilized, trading little changed from last week.
The euro was steady at $1.0921, up 0.1% from last week. On Monday, it briefly surged to $1.1009.
Sterling held at $1.2756 after a 0.49% rally, yet it’s set for a 0.4% weekly drop, marking four consecutive declines.
The Aussie held steady at $0.6595, rising 1.24% this week, bolstered by the Reserve Bank of Australia’s hawkish comments.
The New Zealand dollar hit a three-week high of $0.6035, then edged up 0.2% to $0.6026.
Despite falling inflation expectations, traders now price an 80% chance of a quarter-point rate cut by the central bank on Wednesday.
The Chinese yuan gained 0.3% to 7.1651 per dollar, while July CPI rose 0.5%, surpassing forecasts.
Elsewhere, Bitcoin hit a one-week high of $62,717, trading 3.3% higher at $61,500, and was up 4% weekly.
Click here for more news on Finance and Investing.