Market sentiment is considered risky at the end of this week's trading following the latest report regarding China's announcement of movement restrictions in Chengdu, a city with a population of 21 million people due to the spread of the Covid-19 virus.
This gives the US dollar an advantage as a safe-haven currency to strengthen on Thursday's trading.
In addition, the strengthening of the US dollar was driven by the release of the US manufacturing sector data of the ISM survey with the August reading maintaining the figure of the previous month, beating expectations of a decline.
The US dollar continued to strengthen to a 20-year high based on index readings, and hit a 24-year high against the Yen.
Nevertheless, investors will be wary of the risk of the movement of the US dollar today (Friday) ahead of the US NFP employment data report in the New York session shortly.
After a dismal reading of the ADP data measuring the US private sector, investors expected the NFP data report to also decline with a lower August job growth forecast.
Turning to developments in Europe, the focus remains on the protracted energy crisis. The European Commission is seeking to intervene to tackle skyrocketing energy costs after Russia cut gas supplies to Europe. President Ursula von der Leyen will speak on the matter on September 14.
Russian oil company Gazprom is now cutting gas pipelines to France, while nervous Germans expect the company to close the Nord Stream 1 pipeline again in mid-October.
Russian Deputy Prime Minister Alexander Novak said Russia will increase oil production this year, supporting the extension of the OPEC+ agreement beyond 2022.
This is likely to have a downward effect on the price of oil with the expected decline in demand in risky market sentiment.
The Canadian dollar is expected to come under pressure, in addition to commodity currencies the Australian dollar and the New Zealand dollar are also trading lower.
Gold commodities were also affected seeing the decline in the value of the precious asset falling to $1,690 per ounce as of Thursday yesterday.
