The U.S. dollar retreated in early European trade Friday ahead of the key monthly jobs report, while sterling edged higher after the result of the U.K general election.
At 03:55 ET (07:55 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.4% lower at 104.635, near its lowest point since mid-June.
The dollar traded near two-week lows as traders returned from the U.S. Independence Day holiday ahead of the release of the widely-watched monthly official jobs report, looking for more cues on when the Federal Reserve will start cutting interest rates.
Economic data this week have tended to show a cooling U.S. economy, and this has heightened expectations the Fed will cut rates sometime soon.
Traders are pricing in a 73% chance of a cut in September, according to the CME FedWatch tool.
Economists are expecting the U.S. economy to have added 189,000 jobs in June after a larger than forecast gain of 272,000 the previous month.
GBP/USD rose 0.2% to 1.2780, just shy of the three-week high of 1.2777 seen earlier, after the opposition Labour Party won a massive majority in the U.K. general election, ending 14 years of power for the Conservative Party.
The pound is up 1% for the week, its best weekly performance since mid-May, with the expected change in government being seen as an opportunity for some certainty, despite a difficult fiscal situation, after years of market volatility under the Conservatives.
EUR/USD rose 0.2% to 1.0827, gaining ahead of Sunday's second round of parliamentary elections in France, with polls suggesting the far-right National Rally is likely to fall short of a majority.
The single currency, which has been under pressure since French elections were called in June, is up around 1% this week as worries that RN could gain a majority and introduce big spending increases have receded.
In Asia, USD/JPY traded 0.3% lower to 160.84, with the strengthening of the yen sparking speculation over whether the Japanese government had intervened to support the currency.
Recent weakness in the yen was spurred by growing bets that the Bank of Japan will have limited headroom to tighten policy further, amid persistent weakness in the Japanese economy.
Source : Investing.com
