By Kevin Buckland
TOKYO, Sept 1 (Reuters) - The dollar was on course to snap a six-week winning streak against major peers on Friday, as it headed into a pivotal monthly U.S. jobs report that is likely to inform the path for Federal Reserve policy over the near term.
The U.S. currency dipped to a one-week low against the yen, weighed down by slumping Treasury yields, after a volatile week when overall soft economic data tempered the outlook for further Fed rate hikes.
However, the greenback held on to gains made against the euro and sterling overnight after officials at the respective central banks struck more dovish postures ahead of policy meetings this month.
Elsewhere, the yuan strengthened after the People's Bank of China cut forex reserve requirements for the first time in a year.
The U.S. dollar index - which measures the currency against a basket of six developed-market peers, including the euro, sterling and yen - edged 0.02% lower to 103.61 on Friday, bringing declines this week to 0.53%.
A parade of employment and inflation data has paved the way to the nonfarm payrolls report later in the global day, and much of it has been on the weaker side, leading traders to pare bets for a rate hike on Sept. 20 to 12% from 18% a week ago, according to the CME Group's FedWatch tool.
"The dollar rally is looking quite tired, with outsized falls in response to what are normally second-tier data releases, raising the danger of a dramatic fall if the first-tier payrolls number is soft," said Sean Callow, a senior currency strategist at Westpac.
For the dollar index, "a weekly close below 103.00 seems assured in that case," he said.
Two-year Treasury yields, which are particularly sensitive to rate expectations, have declined about 20 basis points this week to 4.86%, the biggest slide since mid-March.
That has helped push the dollar down against the yen . It slipped 0.03% to 145.485 yen on Friday, putting its loss for the week at 0.65%.
The dollar made up some ground on the euro overnight though. The single currency was little changed at $1.0846 following a 0.74% tumble on Thursday that pared its weekly advance to 0.49%.
European Central Bank board member Isabel Schnabel, a noted policy hawk, said that euro-region growth is weaker than predicted just a few months ago, although she added that rates could still rise further.
ECB Vice-President Luis de Guindos said separately that the central bank is nearing the end of its hiking cycle.
Euro-area data on Thursday showed core inflation fell in August. Expectations for an "upside surprise" had been building after German inflation outpaced forecasts in a reading on Wednesday, said Ray Attrill, head of foreign-exchange strategy at National Australia Bank.