Dollar Firms on Geopolitical Risk and Jobs Data Caution; Asian Currencies Muted

Most Asian currencies traded within a tight range on Friday as the U.S. dollar gained support from its safe-haven status and investor positioning ahead of a crucial U.S. jobs report. The U.S. Dollar Index, which measures the greenback against a basket of major currencies, rose 0.1% to 99.97, extending gains from the previous session.

Dollar Supported by Geopolitical Tensions

The dollar's strength was partly driven by geopolitical uncertainty in the Middle East. According to media reports, an Iranian parliamentary committee is reviewing legislation that could prohibit U.S. and Israeli ships from passing through the Strait of Hormuz.

This development contributed to a rise in oil prices, reviving inflation concerns and increasing the dollar's appeal as a safe-haven asset. The move also followed a general rise in U.S. Treasury yields, which further supported the U.S. currency.

Markets Await U.S. Nonfarm Payrolls

Investors remained cautious ahead of the release of the July U.S. nonfarm payrolls report. The employment data is a key indicator for the Federal Reserve, offering fresh insight into the strength of the labor market and the potential path for monetary policy.

Ad

Recent economic data from the U.S. has presented a mixed picture, making Friday's report a critical event for determining whether Fed policymakers will maintain a hawkish bias or adopt a more cautious stance in the coming months.

Regional Currency Roundup

In Asia, most currencies showed little movement against the stronger dollar.

• The Japanese yen (USD/JPY) was flat at 158.4, giving up some of the sharp gains it made following a rare joint intervention by Japan and the United States last week. The yen had previously fallen to a nearly 40-year low near 164 per dollar in late July.
• The Chinese yuan (USD/CNY) was also largely unchanged, even as the country reported a larger-than-expected trade surplus in July. China's exports grew 24% year-on-year, while imports rose 28%, signaling resilient overseas and domestic demand.
• Elsewhere, the South Korean won and Singapore dollar saw minor fluctuations, while the Indian rupee edged higher and the Australian dollar traded flat.