Currency markets were subdued on Thursday, with the Japanese Yen surrendering part of its intervention-fuelled rally while the US Dollar hovered close to six-week lows.
Investor caution persisted amid uncertainty surrounding a proposed US-Iran agreement and ahead of closely watched US payroll figures.
The Yen was little changed at 157.75 per Dollar after slipping over the previous two sessions. Although it has retreated from Monday’s intervention-supported peak of 155.20, it remains comfortably above its multi-decade low of around 164 per Dollar.
The Euro held steady at $1.1548, while Sterling was unchanged at $1.3456. Meanwhile, the New Zealand and Australian Dollars both slipped 0.2%, trading at $0.5875 and $0.7043, respectively.
The Dollar index, which measures the greenback against a basket of six major currencies, was little changed at 99.70, remaining close to the six-week low reached on Monday as traders searched for fresh direction.
Investors remained on edge as developments in the Gulf continued to unfold after Reuters reported that a proposed agreement between Iran and Oman aimed at ending the US-Iran conflict could hand Tehran control over inbound shipping through the Strait of Hormuz.
The proposal has yet to receive any official response from Washington. While President Trump has said an agreement to reopen the strategic waterway is close, US officials have consistently maintained that they would not accept any arrangement giving Iran authority over access to one of the world’s most critical energy trade routes.
Brent crude futures slipped 0.3% to $79.25 a barrel, hovering around levels last seen in June when the United States and Iran reached an interim peace agreement.
Attention is also shifting to Friday’s US nonfarm payrolls report, which could offer fresh insight into the Federal Reserve’s next interest rate move. The focus comes after recent data showed the US services sector remained resilient in July, although hiring across the sector lost some momentum.
A Reuters survey of economists forecasts that the US economy added 80,000 jobs in July, up from 57,000 in June, while the unemployment rate is expected to remain unchanged at 4.2%.
Federal Reserve Governor Lisa Cook said on Wednesday that she is open to the possibility of raising the central bank’s benchmark interest rate if inflation remains unacceptably high.
Meanwhile, San Francisco Fed President Mary Daly voiced full support for last week’s decision to leave rates unchanged, stressing that policymakers need to see additional economic data before making any decisions at the Fed’s September meeting.