The dollar steadies as markets await US jobs data

The US dollar traded mostly steady with a slightly negative bias on Wednesday as investors monitored geopolitical developments while awaiting key US employment data.

The US Dollar Index was little changed at 99.8 as of 21:35 GMT, after touching its lowest level in six weeks during Monday's session.

Lower oil prices weigh on the dollar

The dollar remained close to its six-week low as demand for the US currency as a safe-haven asset weakened following the decline in oil prices and growing optimism over progress in talks between the United States and Iran.

Pressure on the greenback intensified as oil prices returned to trading near $80 per barrel, while US President Donald Trump said his administration had held "very good discussions" with Iran, reducing demand for the dollar as a traditional safe haven.

Falling oil prices also led markets to scale back expectations for a Federal Reserve interest rate increase at its September meeting, with the probability of a hike slipping to just below 60%, down from around 70% at the beginning of the week, adding further pressure on the US currency.

US jobs data

Investors are now turning their attention to the monthly US employment report due on Friday, which is expected to provide important clues about the strength of the labor market and the future path of Federal Reserve monetary policy.

Later on Wednesday, markets will also receive the July ADP private payrolls report.

The Federal Reserve kept interest rates unchanged at last week's meeting, but dissent from three members of the Federal Open Market Committee gave markets the impression of a more hawkish policy stance.

As a result, expectations have increased that the Federal Reserve could raise interest rates at its September meeting.