By Tom Westbrook
SINGAPORE (Reuters) -The dollar held steady in Asia on Friday and looked set to extend its longest weekly winning streak in over a year, underpinned by rising bond yields and expectations of another strong set of U.S. jobs numbers.
The dollar has gained 0.5% on the yen this week to buy 158.405 yen and nearly 1% on an ailing British pound, which was battered to a 14-month low in tandem with a selloff in gilts and concern about British finances.
The dollar is set for a broadly steady week on the euro, buying $1.0289 and it has notched up small gains on the Australian and New Zealand dollars. [AUD/]
The dollar index is set for a sixth consecutive weekly gain, its longest run since an 11-week streak in 2023 as the U.S. outshines economies elsewhere.
The index was steady in Asia for a 0.4% weekly rise to 109.33.
"We doubt the dollar needs to hand back much of its recent gains," said Chris Turner, global head of markets at ING, noting a shakeout in sterling long positions and risks to the upside for the dollar from U.S. jobs data due later in the day.
"Despite the risk of profit-taking, (the dollar index) found good support under 108 earlier this week."
Sterling fell 0.23% to $1.2278, having touched a 14-month low of $1.2239 on Thursday. The Australian and New Zealand dollars huddled near multi-year lows, with the Aussie - last at $0.61905 - having come within a whisker of breaking a 2022 low of $0.6170.
The New Zealand dollar is testing its 2022 low of $0.5512 and was last at $0.5587.
PAYROLLS
U.S. non-farm payrolls data is expected to show the economy added 160,000 jobs in December on top of the 227,000 in November, with unemployment holding at 4.2%.
Anything stronger would add to the case for fewer Federal Reserve rate cuts and may set off another round of selling in jittery bond markets.
Overnight, Philadelphia Fed President Patrick Harker said he expected the U.S. central bank to cut interest rates, but added that an imminent cut wasn't needed.
Markets have scaled back expectations for U.S. rates cuts in 2025 to around 40 basis points, while concerns about President-elect Donald Trump's potentially inflationary agenda have helped drive up longer-term yields.
"The fact that central banks have said that they were going to be cutting rates was seen by the market as a confirmation that inflation was under control," Alexis Lavergne, investment specialist-fixed income at Janus Henderson Investors said.
"This is likely to be a risk that market participants have to deal with going forward, especially in light of the proposed pro-growth fiscal policies put forward by President Trump for his second term, which are likely to be inflationary in nature."