US dollar rally stalls as Treasury yields retreat

NEW YORK: The yen and euro received much-needed relief on Thursday as the dollar and Treasury yields retreated ahead of the release of key US jobs data that could help determine whether the Federal Reserve hikes interest rates again next month.

After touching an 11-month high earlier this week, the dollar index, which tracks the greenback against six other currencies including the euro and yen, slipped 0.1% to 106.65, as investors turned their attention to the release on Friday of the US Labor Department’s jobs report for September.

Economists in a Reuters poll forecast a gain of 170,000 jobs, down from 187,000 in the prior month. The unemployment rate is expected to have dipped to 3.7% from 3.8%. Data on Wednesday showed US private payrolls increased far less than expected last month.

Although analysts said more evidence was needed to be sure how fast the labor market is cooling, money markets cut their bets for a Fed rate hike in November, and priced in a 76% chance the US central bank will keep its benchmark overnight interest rate steady, according to CME’s FedWatch tool. A month ago, those odds were at 55%.