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• US Dollar Index holds ground ahead of US Nonfarm Payrolls.
• Improved US Treasury yields could provide support for the Greenback.
• US unemployment data showed a tight labor market; awaiting NFP and earnings data for confirmation.

The US Dollar Index (DXY) attempts to snap the two-day losing streak, trading slightly higher around 106.40 during the early Asian trading hours on Friday. The DXY corrected from an 11-month high due to a decline in the US Treasury yields.

However, the previous week’s initial claims for unemployment benefits in the United States (US) showed a downtrend, which indicated improvement in the labor market. US Initial Jobless Claims for the week ending September 29, improved to 207K from the previous reading of 205K, beating the market expectation of 210K.

US Challenger Job Cuts have come down significantly from the previous figure of 75.151K to 47.457K in September. Traders await the upcoming US Nonfarm Payrolls and Average Hourly Earnings on Friday, seeking confirmation of a tight labor market. Upbeat numbers could trigger the US Dollar (USD) and increase volatility in the bond market.

Additionally, the US Treasury yields hold steady to remain positioned near multi-year highs, as the market exercises caution regarding the hawkish stance of the US Federal Reserve (Fed) on interest rates trajectory. The 10-year US Treasury yield holds above 4.70%, close to the highest level since 2007