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Singapore - A gauge of the dollar fell from a one-week high before a US payrolls report on Friday that could signal whether the Federal Reserve will raise interest rates this year.
The US currency declined against a majority of its 16 major counterparts, with the yen rising for a third day as investors continued their rush for the safest assets after four more UK property funds halted withdrawals.
The pound rebounded from a 31-year low and the New Zealand dollar halted two days of declines. Non-farm payrolls rose 180 000 in June, according to the median estimate in a Bloomberg survey, after the smallest increase since 2010 in May.
"The markets today are trading the dollar softer as the greenback gives up some of its recent safe-haven inflows," said Mansoor Mohi-uddin, a Singapore-based strategist at Royal Bank of Scotland Group. "The next key test will be Friday’s payrolls."
Bloomberg’s Dollar Spot Index, which tracks the currency against 10 major counterparts, was little changed as of 7:45 a.m. London time. It’s fallen about 0.5% after reaching its highest level since June 28 on Wednesday.
The greenback slid 0.5% to ¥100.78. It was steady at $1.1085 per euro.
Japan’s currency rose against nine of its 10 developed-market peers as concern escalates about the fallout from the UK vote to leave the European Union.
"The yen is gaining because it is the world’s preeminent safe-haven currency, and dipping below 100 per dollar again is only a matter of time," said Joseph Capurso, a senior currency strategist in Sydney at Commonwealth Bank of Australia.
"Our year-end forecast for the pound of $1.26 looks like it will be met early. At the rate it’s falling, it could be Friday afternoon."
The pound advanced 0.3% to $1.2964, after falling to as low as $1.2798 for the first time since June 1985 on Wednesday. A gauge of sterling against leading global currencies shows it’s down 32% over the past decade. For the year, it’s lost almost 15%.
"The pound’s move yesterday was not going to be sustained ahead of US non-farm payrolls," said Chester Liaw, a senior economist at Forecast in Singapore.
"Players are unwilling to take extended risks in both directions so any move in both ways is going to moderate. That led to some position-squaring."
The Aussie slid against all its 16 major peers after S&P Global Ratings cut the outlook on the nation’s AAA bond rating to negative from stable on concern the unclear outcome from the weekend’s federal election potentially dented the government’s prospects for reining in a budget deficit.
Australia’s dollar weakened as much as 0.7% and was 0.3% lower at 75.01 US cents.
"The negative outlook was clearly a risk, and arguably the market has been living in its shadow since on Monday morning," said Robert Rennie, the global head of currency and commodity strategy at Westpac Banking Corporation in Sydney.
"We should see 74 US cents tested later in the day."
