The U.S. dollar wallowed near a four-month low on Friday as ever-shifting tariff policies fanned uncertainty and increased concern about growth prospects for the world’s largest economy, leaving investors grasping for jobs data due later in the day.
Another reprieve of levies aimed at Mexico and Canada announced by U.S. President Donald Trump on Thursday offered little relief to whiplashed markets, keeping the safe-haven yen not far off its strongest against the greenback since early October, while the Swiss franc hit a three-month peak of 0.8814.
The greenback also lost some ground against the Canadian dollar and Mexican peso following the announcement.
The exemption expires on April 2 when Trump said he will impose reciprocal tariffs on all U.S. trading partners.
Following a slew of mixed economic data out of the United States this week, focus on Friday falls on U.S. nonfarm payrolls numbers as market participants assess whether the economy is headed for a cool-down in growth.
"The signs that U.S. exceptionalism is on the wane continue to increase" and the dollar has "fallen out of favour" amid the uncertainty, with the perceived inflationary impact of tariffs no longer enough to support it, said Kieran Williams, head of Asia FX at InTouch Capital Markets.
"Ahead of the NFP survey, evidence has tilted towards a softer outcome. If this transpires it could spook markets further," he said.
Against a backdrop of federal job culls, the U.S. likely added 160,000 jobs in February compared with 143,000 in January, while the unemployment rate is expected to have held steady at 4.0%, economists forecast in a Reuters poll.
Federal Reserve Chair Jerome Powell will be able to follow up the jobs report when he speaks later in the day on the economic outlook.
Markets currently have three Fed rate cuts priced in for the rest of the year.
WAGE GROWTH BOOSTS BOJ BETS
The euro traded up 0.27% at $1.0815 after strengthening to its highest in four months in the previous session, lifted by the European Central Bank’s hawkish rate cut and surging European bond yields on the back of Germany’s massive spending proposal.
The euro bloc currency was eying its biggest weekly gain since March 2009, up a little over 4% on the week so far.
The U.S. dollar indexfell 0.21% to 103.97, while sterling was little changed at $1.28875.
Against the Japanese currency, the dollar was last down 0.33% at 147.49 yen.
Japan’s largest labour union umbrella group is seeing its member unions demand the biggest salary increase in over 30 years, the group said on Thursday, buoying bets that the Bank of Japan will increase interest rates.
The bright outlook continued on Friday, with Japan’s economy minister Ryosei Akazawa saying the nation has cleared the key threshold for the government to officially declare an end to long-term price deflation.
Elsewhere in Asia, the offshore yuan was steady at 7.2441. China’s exports slowed over the January-February period and imports unexpectedly contracted, official data on Friday shows, as trade tensions escalated with the United States.
The risk-sensitive Australian dollar slid 0.48% to $0.6302 after appreciating to its highest since February 24 on Thursday.
The decline was likely largely because the order stated it will not require additional bitcoin, said Zann Kwan, chief investment officer of Revo Digital Family Office
"At this point, market sentiment has been building up for so long that any news short of extreme excitement will disappoint, as the price has already factored in expectations," she added.
Bitcoin was last down 1.45% at $88,178.66 after paring losses.
Source: Investing