Dollar downtrend to continue amid lower Fed rates, U.S. jobs report

Dollar downtrend to continue amid lower Fed rates, U.S. jobs report

The dollar steadied against its peers on Friday as investors await key U.S. jobs data to get clues about the strength of U.S. economic recovery from the pandemic.

The dollar managed to stop its recent slip, but analysts warned against the dominating weak sentiment for the greenback amid doubts on U.S. economic growth and lower Fed rates. 

Against the euro, the dollar traded at $1.1851 in Asian trade, extending decline from a two-year low hit on Tuesday. The British pound stood at $1.3285, falling from its strongest level in a year. 

The greenback stood at 0.9096 against the Swiss franc and at 106.18 on the yen.

U.S. non-farm payrolls data due later in the day are expected to show a 1.4-million increase in August, slower than the 1.763 million jobs created in July.

The U.S. Federal Reserve last week announced a shift in its policy framework to focus on employment, allowing rates to stay lower for longer and putting pressure on the dollar.

The dollar index was little changed at 92.759 in Asian trade. Analysts say that the dollar’s downtrend will continue for another three months due to the Fed’s monetary policy.

The Aussie steadied at $0.7275, while the kiwi traded at $0.6712. 

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