FOREX-US dollar rises against yen as markets eye Iran deal, jobs report

The US dollar rose 0.41% against the Japanese yen on Thursday, its third straight session of gains, as investors awaited details on a proposed Iran deal and the US jobs report.

The U.S. dollar rose against the Japanese yen on Thursday, helped by safe-haven positioning from investors awaiting details on a proposed deal to end the Iran conflict and ahead of the monthly U.S. jobs report. The dollar has been clawing back some recent intervention-driven losses that had pushed it to ‌a 13-week low against the yen following joint action by Japanese and U.S. Treasury authorities to prop up the currency. The dollar was last up 0.41% against the yen at 158.41, on track for its third straight session of gains after weakening to as low as 155.20 on Monday, its lowest level since early May. "When you strengthen the yen, you by definition weaken the dollar and that's part of what ‌happened in the first part of the week since Friday," said John Velis, FX and macro strategist at BNY. "But the idea that maybe there's some good news on a ceasefire or a deal ‌in the Persian Gulf has taken some of the dollar premium off with lower oil prices and so forth. It's very quiet today because I think the markets are waiting for what happens with non-farm payrolls on Friday."

The euro was down about 0.29% at $1.1519 and sterling fell 0.12% at $1.3454. EYES ON THE GULF Markets remained watchful as tensions continued to play out in the Gulf, after Reuters reported a proposed deal between Iran and Oman to help end the U.S.-Iran conflict could give Tehran control ⁠over inbound ​traffic through the Strait of Hormuz. However, there was ⁠no immediate U.S. comment on the proposal. President Donald Trump has said that a deal to reopen the strait was imminent, but U.S. officials have repeatedly insisted that they would never agree to Iranian control of access to the world's most important ⁠trade route for energy supplies.

Brent crude was up 3.42% to around $82 a barrel, although prices remain well below the almost $100 per barrel hit in July when tensions between Iran and the U.S. flared. PAYROLLS DATA IN FOCUS Investors are ​turning their attention to the release on Friday of the U.S. employment report for July, which could provide more clues on the Federal Reserve's interest rate path. Data showed the country's ⁠services sector stayed strong in July while services-sector employment slowed. A divided U.S. central bank left rates unchanged last month but Fed Chairman Kevin Warsh delivered an unwavering commitment to bring inflation down, leaving the door open to a possible rate hike in September. "Any ⁠data ​release after the Fed meeting in July is just very important," said Francesco Pesole, an FX strategist at ING. "Tomorrow's payrolls could be pretty big for dollar-yen. If it's a hot print then you would probably start to see a new build up of speculative longs on dollar-yen." U.S. nonfarm payrolls are expected to have risen by 80,000 last month after an increase of 57,000 in June, ⁠according to a Reuters survey of economists. The unemployment rate is forecast to hold steady at 4.2%. Fed Governor Lisa Cook said on Wednesday that she was open to the idea that the central ⁠bank may need to raise its short-term interest rate ⁠target to deal with levels of inflation that are "too high." San Francisco Fed President Mary Daly said she was "completely supportive" of last week's decision to hold rates steady and said more data is needed before the central bank's September 15-16 meeting.

The dollar index, which tracks the U.S. currency against six major ‌peers, was up 0.32% at 99.98, ‌edging higher after it hit a six-week low on Monday.