The dollar is falling amid growing expectations of a US interest rate cut.

The dollar declined today, Thursday, in a volatile week amid bond market tensions, with US labor market weakness data boosting expectations of an interest rate cut this month.

The dollar index, which measures the US currency against six major currencies, stabilized at 98.178 after falling 0.17 percent the previous day.

The euro held onto gains made overnight, trading at 1.165775 dollars in the latest transactions.

After a tough week, the British pound stabilized at 1.3442 dollars in early Asian trading hours.

The yen traded at 148.12 against the dollar after making small gains in the previous session.

Several Federal Reserve officials indicated yesterday, Wednesday, that “labor market concerns still support their view that a rate cut is near.”

James Knightley, Chief International Economist at ING, predicted a significant rate cut in the coming months, with little inflationary pressure coming from the labor market.

With the Federal Reserve focusing on the labor market, tomorrow’s key jobs report on Friday will determine the near-term path of interest rate expectations, after data on Wednesday showed job vacancies fell to their lowest level in 10 months in July, while layoffs remained relatively low.