The dollar fell against world currencies on Friday morning in a corrective decline, but remained near record levels for almost 20 years. Markets are waiting for U.S. unemployment statistics, according to trading data. Will the dollar weaken against the euro going forward?

Dollar exchange rate against world currencies

The euro rose to $0.9965 against the dollar from a close of $0.9944. The dollar-yen exchange rate rose to 140.34 yen from 140.2 yen, which was above 140 yen for the first time since 1998. And the dollar index (the exchange rate against a basket of currencies of six U.S. trading partners) was down 0.12%, to 109.56 points, with the index approaching 110 points a day earlier, the highest since June 2002.

On Thursday, the dollar was strongly supported and rose against world currencies to nearly twenty-year highs. This dynamic, especially for the dollar-yen exchange rate, was due to expectations that the U.S. Federal Reserve (Fed) will continue to keep rates high to rein in inflation. According to the CME Group, 74% of analysts expect a rate hike in September — again by 0.75 percentage points, to 3-3.25% per year. Meanwhile, the Bank of Japan continues to pursue a soft monetary policy, having left the rate at negative levels in July.

Later in the trading the markets are waiting for the publication of the data on unemployment in the USA in August. Analysts believe the nation’s unemployment rate held steady at the July level of 3.5% and nonfarm payrolls rose by 300,000 jobs after increasing by 528,000. The statistics are one of the most important indicators for the Fed when deciding on a key rate.

Analysts admit that strong macro statistics may eventually encourage the U.S. central bank to keep raising rates next year as well, which will affect the dollar rate money changer.

Earlier we reported that Gold price continues to decline on expectations of hawkish moves from the U.S. Federal Reserve.