The Dollar was on track for a weekly rise against major currencies on Friday, supported by growing uncertainty over the prospects of a peace deal with Iran, which strengthened demand for the US currency as a safe-haven asset.
The greenback was also boosted by higher Treasury yields after a Financial Times report, citing sources close to Federal Reserve Chair Kevin Warsh, suggested the possibility of a September rate hike depending on upcoming economic data.
Investors are now awaiting the closely watched US monthly jobs report, due later on Friday, for further signals on the Federal Reserve’s future interest-rate path.
The Dollar was largely unchanged against the Yen during Asian trading on Friday afternoon, remaining around 158.365 after gaining 0.4% in the previous session.
The Dollar-Yen pair remained on track for a weekly gain of approximately 0.6%, recovering after coordinated Japanese-US intervention triggered a sharp sell-off. The pair had fallen from near a four-decade high above 163 on Thursday to a 13-week low of 155.20 on Monday.
Against the Euro, the Dollar edged higher to $1.1521 after gaining around 0.3% in the previous session. The greenback was little changed against Sterling, trading at $1.3454.
The Dollar index, which tracks the US currency against a basket of six major currencies including the Euro, Yen and Pound, rose slightly to 99.954. It was up just over 0.1% for the week, following a 1.6% decline the previous week.
Tensions remained elevated in the Gulf after Reuters news agency reported that a proposed agreement between Iran and Oman aimed at ending the US-Iran conflict could potentially give Tehran control over inbound traffic through the Strait of Hormuz.
Washington did not immediately respond to the proposal. President Donald Trump has said a deal to reopen the strait could be imminent, but US officials have repeatedly ruled out accepting Iranian control over access to the strategically vital waterway, one of the world’s most important routes for energy shipments.
Brent crude climbed $1.31 on Friday to $83.80 a barrel, following a gain of more than $3 in the previous session.
Rising inflation risks put pressure on US Treasuries, pushing yields higher.
Moreover, a divided Federal Reserve left interest rates unchanged at its meeting last month, while Warsh reiterated his commitment to bringing inflation under control.
US nonfarm payrolls are expected to have increased by 80,000 last month, following a 57,000 gain in June, according to a Reuters poll of economists. The unemployment rate is forecast to remain unchanged at 4.2%.