The US dollar is on track to record its best weekly performance in more than a month as investors expect the Fed to not cut interest rates next month.
The uncertainty was fueled by a confusing US jobs report that failed to provide a clear signal on whether the central bank should continue its monetary easing measures.
At 10.20 am, the US Dollar Index (DXY) remained at the 100-point level since it opened in early trading on Friday in the Asian session.
The delayed US Non-Farm Payrolls (NFP) report released on Thursday showed a mixed picture of the country's labor market. Job growth was seen to increase in September, but the unemployment rate also rose to 4.4%, a four-year high.
The development reinforced expectations that the Federal Reserve (Fed) is likely to delay a rate cut at its December meeting, as policymakers still grapple with economic uncertainty from the impact of the US government shutdown.
The dollar index, which measures the greenback's strength against a basket of major currencies, continued to edge closer to a 5-1/2-month high and was last seen at 100.20. It is on track to post a weekly gain of 0.9%, its best performance in more than a month.
The government shutdown-hit jobs report failed to provide a clear direction for monetary policy decisions at the December FOMC meeting. While there is a view that a 25 basis point rate cut is still appropriate from a policy perspective, the Fed's actual direction remains uncertain.
Currently, the market is pricing in only a 27% probability of a Fed rate cut next month, reflecting fading confidence in a rate cut in the near term.
