The US dollar rose against other major currencies ahead of eagerly awaited jobs figures that were expected to shed light on the health of the US economy.
The euro, pound and Swiss franc all fell against the US currency as traders prepared for the release of non-farm payrolls at 12.30pm GMT, which were expected to show that the US added 125,000 jobs in October.
The pound fell 0.2 per cent to $1.6096 while the US dollar rose 0.4 per cent against the Swiss franc to SFr0.9366.
Currency analysts said that the US figures were likely to be viewed as highly politically charged ahead of the US presidential election next week, with a strong number being viewed as increasing the chance of an Obama victory and causing the dollar to weaken. A Republican victory is being viewed by currency investors as positive for the dollar, in part due to Mitt Romney’s dislike of monetary easing.
“Since a weak outcome on payrolls may be viewed as damaging to President Obama’s election prospects this is likely to be the most positive outcome for the dollar,” said Todd Elmer, currency strategist at Citigroup.
The euro was also struggling with negative data for the eurozone on Friday, as PMI figures from Markit showed a further slowdown in the region’s manufacturing sector in October. The rate of contraction for national manufacturing industries also increased last month in Germany, Italy, Spain, Austria and Greece, with only Ireland’s manufacturing sector expanding.
The figures helped the euro to fall below $1.29 against the dollar, losing 0.4 per cent to a session low of $1.2887.
The Japanese yen continued to weaken against other major currencies, hitting a fresh low for the week against the US dollar, following further easing by the Bank of Japan earlier in the week. The dollar rose 0.3 per cent to Y80.35. Analysts said that investors were also selling the yen after the BoJ published minutes of its October meeting, at which members raised increasing concerns over the Japanese economy.
