The yen held flat near 157.75 per dollar on Thursday, unwinding part of its intervention-driven gains. Traders stayed cautious as a proposed Iran-Oman deal over the Strait of Hormuz and Friday's U.S. payrolls report kept currency markets guessing.
The yen traded flat at 157.75 per dollar on Thursday after modest declines over the previous two sessions, giving back some intervention-driven gains. It had touched 155.20 per dollar on Monday, yet remains well off a multi-decade low of about 164.
Dollar index stalls near six-week low
The broader dollar index was little changed at 99.70, continuing to struggle for direction after it hit a six-week low on Monday. The dollar index tracks the greenback against six major peers.
Iran-Oman deal keeps traders on edge
Currency markets stayed watchful after Reuters reported a proposed deal between Iran and Oman that could give Tehran control over inbound traffic through the Strait of Hormuz. However, there was no immediate U.S. comment on the proposal, even as President Trump has said a deal to reopen the strait was imminent.
U.S. officials have repeatedly insisted they would never agree to Iran controlling access to the strait, and Brent crude futures slipped 0.3% to $79.25 a barrel, near levels last seen when the U.S. and Iran signed an interim peace agreement in June. According to Reuters, Ray Attrill, head of FX strategy at National Australia Bank, said in a podcast: "The market's very much in sort of watch and wait mode."
Payrolls and Fed rate path in focus
Investors are now turning to Friday's U.S. jobs report for clues on the Federal Reserve's interest rate path, after data showed the services sector stayed strong in July while services-sector employment slowed. A Reuters survey of economists expects nonfarm payrolls to have risen by 80,000 in July after a 57,000 gain in June. The unemployment rate is seen holding at 4.2%.
Fed Governor Lisa Cook said Wednesday she was open to raising the central bank's short-term rate target to address inflation she considers too high. San Francisco Fed President Mary Daly, however, voiced full support for last week's decision to hold rates steady and said more data is needed before September's meeting.
Source: Investing.com
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