Dollar Holds Near Lows Before Payrolls Report

2026-08-06 13:28 By Agna Gabriel 1 min. read

The dollar index edged up to 99.8 on Thursday but remained close to a seven-week low as investors balanced optimism over developments in the Middle East with caution ahead of Friday's closely watched US jobs report.

Iran said it had reached an agreement with Oman on a proposed shipping route through the Strait of Hormuz, raising hopes that energy flows through the critical waterway could resume.

However, a broader US-Iran agreement remains uncertain, with President Donald Trump saying negotiations were ongoing and that he would “see what happens.” Attention has also shifted to the upcoming nonfarm payrolls report, which is expected to provide fresh insight into the strength of the US labor market and the Federal Reserve's policy outlook.

A stronger-than-expected employment reading would likely reinforce expectations of further interest rate hikes, while a weaker report could prompt markets to scale back tightening bets and reduce upward pressure on Treasury yields.



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Dollar Holds Near Lows Before Payrolls Report
The dollar index edged up to 99.8 on Thursday but remained close to a seven-week low as investors balanced optimism over developments in the Middle East with caution ahead of Friday's closely watched US jobs report. Iran said it had reached an agreement with Oman on a proposed shipping route through the Strait of Hormuz, raising hopes that energy flows through the critical waterway could resume. However, a broader US-Iran agreement remains uncertain, with President Donald Trump saying negotiations were ongoing and that he would “see what happens.” Attention has also shifted to the upcoming nonfarm payrolls report, which is expected to provide fresh insight into the strength of the US labor market and the Federal Reserve's policy outlook. A stronger-than-expected employment reading would likely reinforce expectations of further interest rate hikes, while a weaker report could prompt markets to scale back tightening bets and reduce upward pressure on Treasury yields.
2026-08-06
Dollar Holds Losses on Hormuz Deal
The dollar index hovered around 99.6 on Thursday, remaining close to a seven-week low as the agreement to partially reopen the Strait of Hormuz weighed on oil prices, easing inflation pressures and diminishing expectations for more aggressive Federal Reserve tightening. Iran and Oman agreed to establish a shipping corridor through the strait, strengthening hopes for improved energy supplies from the Middle East. Investors have since reduced their expectations for Fed rate hikes this year, now anticipating only one increase by year-end, compared with two as recently as last week. Meanwhile, Fed Governor Lisa Cook reiterated that she is prepared to raise rates if inflation does not continue to ease. Separately, San Francisco Fed President Mary Daly said she supported the central bank’s decision to leave rates unchanged last week, while cautioning that persistently elevated inflation may require a more forceful policy response.
2026-08-06
US Dollar Index Holds at 7-Week Low
The dollar index fell to below 99.8 on Wednesday, the lowest in seven weeks, holding the sharp decline triggered by intervention on the yen and foreign selling of long-term, dollar denominated fixed-income assets last week. The recent plunge for the yen and JGBs drove the US Treasury and the Japanese counterpart to buy an estimated $88 billion in JPY, with a portion of dollar selling featured in the intervention. The developments were in tandem with pressure from the Fed's latest rate hold. During the presser, Fed Chairman Warsh signaled some reluctance to confirm that a rate hike would be his preferred reaction to higher inflation, leading foreign markets to trim holdings of dollar-denominated assets. In turn, expectations of a Fed hike next month were dimmed by a fresh pullback in key energy prices and a soft ADP employment report.
2026-08-05