FOREX-Dollar gains against yen with markets eyeing US jobs report

The dollar edged higher against peer currencies including ‌the Japanese yen on Thursday, as investors awaited Friday's crucial nonfarm payrolls report, which could help assess the U.S. labor market and the probable path of interest rates. Data on Thursday showed that the number of Americans filing new applications for unemployment benefits increased moderately last week ⁠amid relatively low layoffs. U.S. job openings fell more than expected in November while hiring eased, according to a Labor Department report on Wednesday.

"The market is looking for a bit more definitive evidence as to which way the economy is going," said Marvin Loh, senior global market strategist at State Street in Boston."The consensus is that the dollar will continue to weaken from here given ​that there's still rate cuts expected from the Fed." The dollar was up 0.12% against against the Japanese yen at 156.925.

The dollar index, which measures the U.S. currency against six ‍rivals, was up 0.08% at 98.802 after hitting its highest since December 10. Traders are pricing in at least two rate cuts from the Federal Reserve this year, although a divided central bank indicated in December there would be only one cut in 2026. The Fed is expected to keep rates steady at its meeting this month. Jerome Powell's term as Fed chair ends in May.

"I think to a certain degree, we are going to be ⁠range bound for ‌a little while until we get a ⁠little more clarity on whether or not the Fed is going to not only resume their cutting cycle but also cut more aggressively with the new leadership changes expected at the Fed a little later this year," ‍Loh added. President Donald Trump's administration could be forced to refund more than $133.5 billion in tariffs to importers if the U.S. Supreme Court this week declares his duties unlawful could resurface to hurt the dollar. Trump said on ​Wednesday the 2027 U.S. military budget should be $1.5 trillion, stoking some concerns about rising debt and a higher risk premium on U.S. assets. EURO ZONE DATA AND GREENLAND ⁠IN FOCUS On the euro front, recent inflation figures drove the currency lower and German Bund yields to a one-month low.

The euro was down 0.09% at $1.1665 on Thursday, after dropping by 0.45% in the last two sessions. "Soft European inflation ⁠reinforces dovish sentiment, while the Greenland crisis underscores Europe's relative vulnerability, potentially triggering further euro selling," said Olivier Korber, foreign exchange strategist at Societe Generale. U.S. Secretary of State Marco Rubio told reporters Trump retained the option to address his objective to take over Greenland by military means, while alarmed allies, including France and Germany, were working on a response.

Analysts flagged that the debate ⁠about changes in European Central Bank policy shifted towards the possibility of a rate hike a year from now, while inflation is currently getting back to target with core edging ⁠lower. The dollar was up 0.06% to 0.798 against ‌the Swiss franc .

Shares in Japanese chemical manufacturers fell on Thursday while those of their Chinese rivals jumped after China said it was launching an anti-dumping probe into imports of chemicals used in chipmaking. The Australian dollar eased 0.38% to $0.66945, just below the 15-month high it touched earlier ⁠this week. The Chinese yuan rose 0.15% against the greenback to 6.984 per dollar.

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