Dollar Dips to Three-Week Low as Labour Wins UK Election

The dollar hit a three-week low ahead of U.S. payrolls data that could influence Federal Reserve interest rate decisions. Concurrently, the British pound strengthened following a Labour victory in the UK election. Cryptocurrencies also experienced a downturn, with bitcoin facing its worst week in over a year.

The dollar reached a three-week low on Friday as traders awaited U.S. payroll data, which could dictate the Federal Reserve's interest rate strategy. Concurrently, the British pound surged as the Labour Party clinched a significant victory in the UK general election, boosting market sentiment.

The euro was poised for its largest weekly gain of the year against the dollar, benefitting from uncertainty in French politics ahead of Sunday's elections. Meanwhile, cryptocurrencies struggled, with bitcoin experiencing its worst week in over a year, following rumors of token sell-offs from the defunct Japanese exchange Mt. Gox.

U.S. payrolls data, expected to show 190,000 new jobs added in June, has stoked anticipation of Federal Reserve rate cuts. Analysts suggest that weaker labor demand could prompt a Fed pivot as early as September. Investors also closely monitor the political landscape, with President Biden under pressure from his party ahead of the November election.

(With inputs from agencies.)