Forex Today: Dollar consolidates gains as focus shifts to US August jobs report

Here is what you need to know on Friday, September 2:

Fueled by the upbeat macroeconomic data releases from the US, the US Dollar Index (DXY) surged to its highest level in nearly two decades at around 110.00 on Thursday. With investors taking a step back ahead of the US August jobs report, the DXY consolidates its gains near 109.50. Reflecting the cautious market mood, US stock index futures trade mixed in the early European session and the benchmark 10-year US Treasury bond yield stays in negative territory below 3.25%. 

The US Department of Labor announced on Thursday that the weekly Initial Jobless Claims declined to 232K, compared to the market expectation of 248K, last week. Additionally, the ISM Manufacturing PMI survey revealed that the business activity in the manufacturing sector continued to expand at a healthy pace in August. More importantly, the Employment Component jumped to 54.2 in August from 49.9 in July, reviving optimism for an upbeat labour market report on Friday.

The US Bureau of Labor Statistics is expected to report an increase of 300,000 in Nonfarm Payrolls (NFP) in August following July's impressive growth of 528,000. The annual wage inflation is forecast to edge higher to 5.3% with the Labor Force Participation Rate remaining unchanged at 62.1%.

Nonfarm Payrolls Preview: Five reasons to expect a win-win release for the dollar.

EUR/USD came within a touching distance of 0.9900 on Thursday but managed to stage a rebound early Friday. The pair was last seen trading in positive territory slightly below parity.

GBP/USD touched its weakest level in over two years at 1.1500 on Thursday before claiming above 1.1550 early Friday. 

Gold dropped below $1,700 for the first time since late July on Thursday but advanced beyond that level in the European morning on Friday. 

US August Nonfarm Payrolls Preview: Analyzing gold's reaction to NFP surprises.

Boosted by rising US yields and the broad-based dollar strength, USD/JPY reached its highest level in 24 years above 140.00. Japanese Finance Minister Shunichi Suzuki said on Friday that he would not comment on every day-to-day move in foreign exchange markets but reiterated that they would take action if necessary.

Bitcoin stays relatively quiet on the last trading day of the week and moves up and down in a tight channel slightly above $20,000. Ethereum closed the second straight in positive territory and was last seen posting small daily gains at around $1,600.