TOKYO: The dollar was on the defensive on Friday following its biggest drop in a month against major peers, as it tracked a retreat in U.S. yields from nearly three-month highs after depressed Treasury prices drew buyers.
For the week though, the dollar was set for a fourth straight weekly rise and the 10-year Treasury yield for a sixth, driven by a run of robust U.S. economic data that signals a very patient approach to Federal Reserve interest rate cuts. A parade of potentially pivotal events begin next week with the monthly U.S. payrolls report on Friday. The U.S. presidential election follows on Nov. 5, with a Fed policy decision two days later.
In terms of economic data overnight though,"the narrative was a positive one and opened up the room for a touch of risk-taking," Rodda said. Weekly data showed an unexpected drop in new applications for U.S. unemployment aid overnight.