Mixed Job Market Signals Keep U.S. Dollar on Edge

The U.S. dollar wavered near a one-week low against major peers as mixed job market data emerged ahead of crucial payrolls figures. Traders are awaiting the Fed's policy response, with analysts predicting varying outcomes for the labor market and interest rate adjustments. The dollar index has seen a marginal decline this week.

The U.S. dollar remained close to a one-week low against major currencies on Friday as mixed job market data fueled uncertainty ahead of key payrolls figures. This data is expected to strongly influence the Federal Reserve's policy direction.

The dollar index, measuring the currency against a basket of six key counterparts, held steady at 101.03 as of 0015 GMT. It dipped approximately 0.2% overnight, reaching 100.96 for the first time since Aug. 29. The index has fallen close to 0.7% this week. Thursday's report indicated a drop in new jobless claims, allaying fears about a rapidly declining labor market. However, prior figures showed private jobs growth at a 3-1/2-year low.

With economists predicting an increase of 165,000 jobs in August, up from July's 114,000, traders are anxiously awaiting the Fed's response. Governor Christopher Waller and New York Fed President John Williams are expected to speak before the blackout period preceding this month's policy meeting. Currently, there's a 40% chance of a 50-basis point rate cut on Sept. 18, according to CME Group's FedWatch Tool. Federal Reserve Chair Jerome Powell had earlier indicated a shift in focus from inflation control to preventing job market deterioration.

(With inputs from agencies.)