* Dollar index slips, at one-week low
* Sterling up 0.2% vs dollar
* Offshore yuan near 10-week highs
* Graphic: World FX rates https://tmsnrt.rs/2RBWI5E
LONDON, May 7 (Reuters) - The dollar was stuck around a one-week low on Friday, under pressure ahead of U.S. jobs data that is expected to underpin hopes for a strong post-pandemic economic recovery and to increase investor risk appetite.
Against a basket of major currencies, the dollar index was at 90.841, down less than 0.1% on the day at 0728 GMT. It was on track for a loss of around 0.5% on the week overall, having seen its worst day in nearly two weeks on Thursday.
U.S. payrolls data is due at 1230 GMT and is expected to show that employers hired nearly a million workers in April, as they rushed to meet a surge in demand unleashed by the reopening of the economy and massive financial help from the government.
In the previous session, a larger-than-expected fall in jobless claims saw stocks rise and the dollar fall, suggesting that the dollar is acting as a safe-haven currency, hurt by improving risk appetite.
But if improving economic data stokes inflation worries and leads to expectations that the Federal Reserve will reduce monetary stimulus, that could boost U.S. yields and the dollar.
Commerzbank strategist You-Na Park-Heger said that the dollar could benefit in the short-term from the data.
"A good result brings the U.S. central bank's target closer," she wrote in a note to clients.
"However, today's data is unlikely to have any direct significance for the Fed as it will require a lot of more good data yet to get the Fed to take action. As a result, the labour market report is unlikely to be trendsetting for EUR-USD."
At 0729 GMT, the euro was up 0.1% on the day at $1.207 .
UK ECONOMY
The British pound was a touch stronger against the dollar at $1.3911 and steady against the euro at 86.79 pence per euro.
The Bank of England said on Thursday that Britain's economy would grow by the most since World War Two this year and slowed the pace of its trillion dollar bond-purchasing programme, but stressed it was not reversing its stimulus.
Just over a third of the results of the Scottish parliamentary election will be announced on Friday and the remainder will be announced on Saturday.
China's exports unexpectedly accelerated in April and import growth hit a decade high, helping to push the yuan and Asian stocks higher.
China’s yuan was at a more than two-month high versus the dollar, set for its longest weekly winning streak since September, helped by the strong trade data and softer dollar.
The Australian dollar was down 0.3% versus the U.S. dollar, at 0.77645, while the New Zealand dollar was down 0.4% at 0.72125.
The Aussie has been supported by a strong rally in the prices of Australia's top export earner, iron ore.
The Reserve Bank of Australia (RBA) upgraded forecasts for the country's economy, though inflation and wages growth are seen lagging in a sign that monetary policy will remain highly accommodative for years to come.
"We expect the likes of AUD, CAD and NOK to remain well supported with the backdrop for positive optimism over global growth still quite favourable," wrote MUFG head of research Derek Halpenny in a note.
The Canadian dollar was down 0.2%, having surged on Thursday to its strongest in more than three years against the U.S. dollar.
"There could be some profit-taking on today's Canadian employment data, which is expected to be bad," Marshall Gittler, head of investment research at BDSwiss Group, said in a note.
Elsewhere, the cryptocurrency ether was steady, having hit a new all-time high on Thursday.
Bitcoin was little changed, at around $56,000.
(Reporting by Elizabeth Howcroft; additional reporting by Hideyuki Sano Editing by Gareth Jones)
https://finance.yahoo.com/news/forex-dollar-near-one-week-075724233.html
2021-05-07 07:57:24Z
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