Dollar on course for a second straight week ahead of US jobs report

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Dollar on course for a second straight week ahead of US jobs report

The dollar was on course for a second straight week of gains against major peers on Friday ahead of a key US jobs report that could sway the timing of Federal Reserve interest rate increases.

The Bank of England lost the market off-guard on Thursday after sterling headed for its worst week in 11.

The dollar index, which measures the dollar against a basket of six rivals, was steady at 94.341 after rallying 0,51% overnight. That lifted it into the positive for the week, adding 0.21%.

The British pound was little changed on Friday because of a 1.36% slump in the previous session that set it up for a 1.34% slump for the week.

Following some of the biggest central banks knocked back bets for early rate hikes, investors have been forced to reset monetary policy expectations this week.

The European Central Bank President Christine Lagarde pushed back on Wednesday against market bets for a rate increase as soon as next October and said it was very unlikely that such a move would occur in 2022.

Fed Chair Jerome Powell said he was in no rush to increase borrowing costs, even as the Federal Open Market Committee announced a $15 billion monthly tapering of its $120 billion in monthly asset purchases.

The Fed has set a labour market recovery as a condition for rates lift-off. Economists predict a rise of 450,000 jobs in October, after a 194,000 rise in the prior month.

The FOMC delivered a "dovish taper," but the USD is still better positioned than most, Westpac strategists wrote in a client note.

The analysts said that payrolls this week should be at least as strong as consensus, given signs that recovery momentum is accelerating again, making the mid 93 s a buying opportunity for the dollar index.

The euro was not on course for a slight decline this week because of the drop of 0.49% overnight.

The dollar was nearly flat at 113.78 yen, down by 0.22% since last Friday. While the Bank of Japan is set to be slowest among developed-market central banks to normalize policy, the Japanese currency benefited as those expectations remained constant while investors cut bets elsewhere.

The Reserve Bank of Australia set a tone for the week on Tuesday, when policy makers stuck to their dovish stance in the face of increasingly sticky inflation pressures.

The Aussie dollar was about flat on Friday, holding the previous session's 0.67% decline and on course for a 1.56% drop this week.

New Zealand's kiwi dollar was mostly unchanged after a 0.81% slide on Thursday, which set up a 0.96% weekly loss.

Among cryptocurrencies, bitcoin was around $61,300 and had a large amount of traded sideways since it hit its all-time high above $67,000 last month.

Ether, the second-biggest coin, traded around $4,500 after hitting a record high of $4,670, trading around $4,500. On Wednesday, 81 was there.