The dollar edged down on Thursday on caution ahead of this week's U.S. employment figures, pulling away from a three-month high against a basket of major currencies touched after Federal Reserve officials said a December "lift-off" in U.S. rates is possible. The dollar index .DXY, which tracks the greenback against six major peers, was down about 0.1 percent at 97.874, after it rose to a three-month peak of 98.054 on Wednesday. Economists expect the U.S. nonfarm payrolls report on Friday to show that U.S. employers have added 180,000 jobs last month, according to a Reuters poll. ECONCN "We're getting into the pre-payrolls positioning now, and the usual malaise ahead of that number," said Sue Trinh, senior currency strategist at RBC Capital Markets in Hong Kong. "Especially after the recent large moves as well, the market would be rather reluctant to be pushing too far ahead of that number," she said. The dollar's overnight gains were made after Federal Reserve Chair Janet Yellen laid out what now appears the base case at the U.S. central bank: that the country is ready for higher interest rates. Driving home the point, William Dudley, the influential president of the New York Fed and a permanent voter on policy, later said the he would "completely agree" with Yellen that December is a "live possibility" for raising rates. Treasury yields jumped as a result, with the two-year reaching a high not seen since April 2011. That in turn helped the greenback break out of its recent 120.00-121.60 range against the yen JPY=, to reach a two-month high of 121.72 yen on Wednesday. It was last down about 0.1 percent at 121.49 yen. With the European Central Bank all but promising to go the other way - providing more policy stimulus - the euro slid to its lowest in over three months at $1.0843 EUR= overnight, and was last slightly higher at $1.0870. Some analysts warned dollar bulls not to get too carried away in the lead-up to the U.S. employment data. "Clearly, however, the Fed remains data dependent and in the near term there is still risk of dollar disappointment around Friday's jobs report," analysts at BNP Paribas wrote in a research note to clients. Commodity currencies were also swept aside in the dollar's broad-based rally. The Australian dollar AUD=D4 dipped to $0.7148, pulling back from Wednesday's one-week high of $0.7224. Even upbeat comments on the economy from the head of the Reserve Bank of Australia failed to give the Aussie a lift. Its New Zealand peer hit a one-month low of $0.6574 NZD=D4 on Wednesday, and was last up about 0.1 percent at $0.6595. Sterling also nursed modest losses against the greenback, slipping to $1.5385 GBP=D4 from this week's high near $1.5498 on Monday. Traders are likely to tread cautiously on "Super Thursday," when the BoE releases its quarterly Inflation Report as well as an interest rate decision and the minutes from its latest Monetary Policy Committee meeting. The BoE is expected to keep rates at historic lows, with most economists expecting only MPC hawk Ian McCafferty to continue to vote for an immediate hike. But some reckon another of the nine MPC members may join him.
