NEW YORK: The US dollar fell against a basket of currencies on Thursday after US manufacturing activity unexpectedly declined in August, casting new doubts on the strength of the US economy.

The data overturned earlier dollar strength as investors wait on highly anticipated jobs data due on Friday for new clues on when the Federal Reserve will next raise interest rates.

Fed Vice Chair Stanley Fischer said last week that the jobs data for August will be a consideration for when the Fed raises rates. Employers are expected to have added 180,000 jobs in August, according to the median estimate of 89 economists polled by Reuters.

His comments followed a relatively hawkish speech by Fed Chair Janet Yellen, which has raised expectations the US central bank is moving closer to an interest rate hike.

“People are focusing on the jobs data,” said Vassili Serebriakov, a currency strategist at Credit Agricole in New York.

Higher Treasury yields helped demand for dollars earlier on Thursday, but “the majority of the participants are on the sidelines waiting for the numbers tomorrow,” Serebriakov said.

The dollar index, which measures the currency against a basket of six majors, fell 0.23 percent to 95.787, after earlier trading as high as 96.239.

The greenback was 0.04 percent stronger against the yen to 103.45 yen, after earlier rising to 104.00, the highest since July 29.

Sterling jumped 1.17 percent against the dollar and hit a one-month high against the euro on Thursday after data showing the British manufacturing sector staged one of its sharpest rebounds on record in August.

Sterling gained to $1.3289, from $1.3152 beforehand while the euro fell to 83.975 pence per euro, down from 84.68 pence before the survey was released.—Reuters