TOKYO, Nov 5 - The dollar was on course for a second consecutive week of gains against major peers on Friday ahead of a key US jobs report that could increase the timing of Federal Reserve interest rate increases.
The bank of England kept rates steady on Thursday, sterling headed for its worst week in 11.
The dollar index, which measures the dollar against a basket of six rivals, was steady at 94.327 after rallying 1.51% overnight. It lifted it into the positive for the week, adding 0.20%.
The British pound was little changed on Friday after a 1.36% drop in the previous session, which set it up for a 1.39% slump for the week.
Since some of the biggest global central banks knocked back bets for early rate hikes, investors have been forced to reset monetary policy expectations this week.
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.
The Federal Open Market Committee said that he was in no rush to increase borrowing costs, even as he said he was in no rush to increase borrowing costs, even as he 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. According to economists, the U.S. non- farm payrolls will be due later on Friday, a 450,000 surge in jobs in October, following a 194,000 rise in the prior month.
The FOMC created a ``dovish taper, but theUSD is still better positioned than most, Westpac strategists wrote in a client note.
Payrolls this week should be at least as strong as consensus given signs of recovery momentum getting accelerating again, making the mid 93 s a buying opportunity for the dollar index, they said.
The euro was small changed at $1.1556 after falling 0.49% overnight, making it on course for a 0.16% decline this week.
When the markets are dominated by the "Taking away the Punch Bowl" theme, this force will be consistently corrosive against the euro, according to a research note by the Deutsche Bank macro strategist Alan Ruskin.
It could need more than payrolls to break 1.15 but payrolls don't remain in the way of theUSD coming away from the major downside support, which is why it may need more than payrolls to break 1.15. The dollar was flat at 113.67 yen, down by 0.29% 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 the tone for the week on Tuesday, when policy makers stuck to their dovish stance in the face of increasingly sticky inflation pressures.
The RBA said on Friday that an increase in the cash rate in 2023 could be warranted. The Board doesn't guarantee an increase in the cash rate in 2022 as markets are pricing.
The Aussie dollar was lower on the day at $0.7394, which added to the previous session's 0.67% decline and putting it on course for a 1.67% drop this week.
The New Zealand's kiwi dollar went down 0.09% to $7.30915 after a 0.81% drop on Thursday, set up a 1.07% weekly loss.
There was a large traded sideways between cryptocurrencies, which was around $62,100, having traded sideways since it hit its all-time high above $67,000 last month.
After hitting a record high of $4,670, Ether was trading around $4,500 after hitting a record high of $4,500. The numbers were 81 on Wednesday.