By Arab Desk
The pound hit its highest level in nearly a year, the euro has recouped some of the losses it suffered after Thursday’s European Central Bank meeting, and the yen is heading for its first gain weekly in almost a month, benefiting from the demand for shelters.
The dollar index, which measures the value of the US currency against other major currencies, fell slightly to 101.31, heading for its second weekly decline.
Growing expectations of a U.S. interest rate cut later in the year have clouded the outlook for the dollar, while further turmoil among U.S. banks has increased recession risks and speculation that the U.S. Federal Reserve could soon change course.
The U.S. central bank raised interest rates by a quarter of a percentage point on Wednesday, signaling that it may end its aggressive monetary tightening campaign.
US bank stocks fell this week, with the collapse of First Republic Bank and Los Angeles-based PacWest Bancorp announcing it was reviewing available strategic options.
April’s nonfarm payrolls report, due later Friday, could give currency markets a new direction.
Experts polled by Reuters predicted the US economy would create 180,000 new jobs, up from 236,000 in March.
The dollar settled at 134.26 yen, but the Japanese currency is heading for a weekly gain of 1.5%, after suffering losses for three consecutive weeks.
The pound jumped to $1.2633, hitting its highest level in almost a year. It also rose 0.2% to 87.44 pence per euro.
The euro edged higher to $1.1021, after coming under pressure on Thursday, after the European Central Bank slowed the pace of interest rate hikes with a 25 basis point hike, indicating that previous moves had an impact on the economy.
The Australian and New Zealand dollars were among the biggest beneficiaries of the decline in the US currency as they hit multi-week highs and then the New Zealand pared gains later.
Against the Swiss franc, the dollar rose 0.64% to 0.8915 francs.
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Source: Dollar drops ahead of US nonfarm payrolls report
