The Dollar fell to a one-month low against the Yen and a one-week low against the Euro on Friday, due to a mix of US job market data that raised caution ahead of a key monthly payrolls report later in the day. 

A Thursday report indicated that new unemployment benefit claims had decreased the previous week and layoffs were still low, which eased concerns about a rapid decline in the labour market. 

This came after data released the day before showed private sector job growth had dropped to its lowest point in three and a half years in August, Reuters reports.

Traders are currently estimating a 41% chance of a significant 50-basis point Fed interest rate cut on 18th September, compared to a 59% likelihood of a smaller quarter-point reduction, according to the CME Group's FedWatch Tool.

The day before, the odds for the larger cut were at 44%, up from 30% a week earlier.

This uncertainty comes as traders await Friday’s payroll report, with Reuters economists forecasting an increase of 165,000 jobs in August, an improvement from the 114,000-rise recorded in July.

“Payrolls number will likely come out on the weaker side, as most economists submitted their forecasts last week without seeing these leading indicators,” stated Shoki Omori, chief Japan desk strategist at Mizuho Securities.

“I see a negative outcome, (but) of course if the overall print comes out strong, recent history tells us that USD/JPY can jump up roughly 80c," to around 144 based on current levels, he added.

The greenback fell 0.7% to 187.63 Yen at the time of writing, a low not seen since 5th August. 

Whereas the Euro maintained its position at $1.11145, slightly below Thursday's peak of $1.11195, which was the highest level since 29th August.

There was little change for Sterling on Friday at $1.3172, close to the overnight high of $1.31855.

The Dollar index, measuring the currency against six peers, fell 0.1% to 100.94, a one-week low. This week it has fallen almost 0.8%.