Dollar is preparing for a weekly loss ahead of an important report on US jobs

The dollar is set to end a six-week winning streak against major currencies on Friday, with the approaching release of an important monthly report on jobs in the United States that is likely to determine the course of the Federal Reserve’s policy in the coming months.

The dollar fell to its lowest level in a week against the yen, affected by a decline in Treasury bond yields after a volatile week in which generally weak economic data dampened expectations of another US interest rate hike.

However, the dollar held onto gains against the euro and pound overnight after policymakers at the European Central Bank and the Bank of England took more dovish stances ahead of policy meetings this month.

On the other hand, the yuan received support after the Chinese central bank reduced foreign exchange reserve requirements for the first time in a year.

The dollar index, which measures the performance of the US currency against a basket of six currencies including the euro, British pound and yen, fell 0.05 percent to 103.58 on Friday, bringing the decline during the week to 0.53 percent.

The non-farm payrolls report will be released later on Friday, after data on employment and inflation were mostly weak, prompting traders to reduce bets on raising interest rates at the central bank’s September 20 meeting.

Two-year Treasury yields, which are highly sensitive to interest rate expectations, fell about 20 basis points this week to 4.86 percent, the largest decline since mid-March.

This contributed to the dollar falling against the yen. It fell 0.08 percent to 145.405 yen on Friday, making its loss during the week 0.7 percent.

The euro saw little change and settled at $1.08455 after falling 0.74 percent on Thursday.

Data from the euro zone on Thursday showed core inflation fell in August.

The yuan jumped to its highest level since August 11 at 7.2392 to the dollar in foreign trading before giving up some of those gains. The dollar fell in the latest trading by 0.25 percent to 7.2574 yuan.

The People’s Bank of China said in an online statement that it will reduce foreign exchange reserve requirements by 200 basis points to four percent, effective September 15, in an effort to support the currency, which fell to an 11-month low of 7.3426 in mid-August.