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The dollar remained near a six-week high as investors awaited crucial jobs data that could influence U.S. Interest rates. Safe-haven demand due to the Middle East conflict and expectations of more dovish moves by central banks supported the dollar against other major currencies.
The dollar index, measuring the U.S. currency against a basket of others, stood at 101.85, close to its six-week peak. Sterling edged higher after Bank of England Chief Economist Huw Pill suggested a gradual approach to interest rate cuts, contrasting with Governor Andrew Bailey’s previous comments.
The euro remained flat at $1.1029, while all eyes were on the upcoming U.S. non-farm payrolls report expected to show 140,000 job additions with steady unemployment at 4.2%. Expectations of a more hawkish Federal Reserve following upbeat economic data have tempered hopes of aggressive rate cuts.
Market participants will closely watch the U.S. economic picture and Fed Chair Powell’s tone regarding future rate adjustments. The pound attempted a recovery after Bailey’s comments on potential rate cuts, with the pound last trading at $1.31690, reflecting a 2% drop from recent highs.
Elsewhere, the yen gained some ground, but remained close to recent lows due to dovish statements from Japanese officials. Analysts anticipate the Bank of Japan to maintain current rates in the near term ahead of the country’s upcoming general elections on Oct. 27.
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Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.
