LONDON—The dollar retreated on Friday, ahead of a key employment report later that could offer a litmus test of the strength of the U.S. economic recovery, but with the Federal Reserve’s commitment to fighting inflation, strategists believe any weakness won’t last.
The euro and the pound pared overnight losses and rose for the first time in three trading sessions, while the Japanese yen clawed back from another break through the key 145 level against the dollar.