Currency Markets Brace for U.S. Jobs Data Amid Global Trade Tensions

The dollar lingered close to its 3-1/2-year lows as markets remained vigilant ahead of a crucial U.S. jobs report. Expectations are growing around the potential impacts of a U.S.-Vietnam trade accord, given the looming July 9 implementation of U.S. tariffs.

Sterling showed a slight recovery after a previous decline, as investor anxiety over UK finances persisted despite government support for finance minister Rachel Reeves, following her emotional plea in parliament. Meanwhile, the yen slightly weakened, maintaining its subdued tone in currency markets.

Focus has now shifted to the U.S. Labor Department's employment report, which could reveal rising unemployment levels. Discussions on potential Federal Reserve interest rate cuts are intensifying, with broader implications for both domestic and international markets. Trump's recent trade talks reveal the complexity of global negotiations amid fiscal worries.

(With inputs from agencies.)