Here is what you need to know on Friday, August 5:

The dollar weakened against its rivals amid falling US Treasury bond yields on Thursday but managed to regain its traction early Friday. Ahead of the all-important US July jobs report, the US Dollar Index posts modest daily gains near 106.00. The European docket will not be featuring any high-impact data releases and the market mood remains relatively upbeat with US stock index futures trading in positive territory. Meanwhile, the benchmark 10-year US Treasury bond yield moves sideways below 2.7%, allowing the greenback to stay resilient in the early European morning.

Nonfarm Payrolls Preview: High expectations set deal the dollar a blow, create buying opportunity.

On Thursday, the Bank of England (BOE) announced that it raised its policy rate by 50 basis points to 1.75% following its August policy meeting. In its revised projections, however, the BOE said that it expects the UK economy to tip into recession in the last quarter of the year. The gloomy economic outlook caused the British pound to suffer heavy losses and GBP/USD dropped to a daily low of 1.2065 before staging a rebound amid renewed dollar weakness in the second half of the day. At the time of press, the pair was moving sideways near 1.2150. 

BOE Analysis: Brutally honest Bailey blasts the pound, why further falls are likely.

EUR/USD gained more than 50 pips on Thursday but failed to preserve its bullish momentum. Nevertheless, the pair continues to trade above 1.0200. The data from Germany showed earlier in the day that Industrial production expanded by 0.4% in June but this reading had little to no impact on the shared currency’s valuation.

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