Sterling and the Japanese yen weakened on Tuesday due to concerns about government finances, boosting the dollar. U.S. jobs data on Friday will influence the dollar’s direction. Britain’s 30-year borrowing costs rose to highest levels since 1998, leading to currency market pressure. Gold reached record highs amidst market anxiety.

The U.S. appeals court ruled that most of Donald Trump’s tariffs are illegal, allowing them to remain until October 14 for appeal. U.S. Congress returning leaves little time to pass funding legislation to prevent a government shutdown. The forex market focused on U.S. jobs data, ignoring a weaker-than-expected ISM manufacturing PMI release.

Sterling was affected by worries about Britain’s fiscal situation before the upcoming budget, while dovish comments from a Bank of Japan official and the resignation of a ruling party official weighed on the yen. Finance minister Rachel Reeves may raise taxes in the autumn budget to meet fiscal targets. The dollar gained support from rising U.S. Treasury yields.

The dollar has declined this year but rose on Tuesday, up 0.74% against major currencies. Markets expect a 91% chance of a 25 basis point rate cut by the Federal Reserve this month. Concerns about Fed independence arose after Trump’s calls for lower rates and the firing of Fed Governor Lisa Cook. Euro zone inflation edged up in August, likely keeping ECB rates steady.

Gold prices steadied after hitting all-time highs, up 1.59% at $3,531.08 a troy ounce. The market awaits U.S. economic data this week to test rate cut expectations. The ECB is expected to keep rates unchanged. Bond market turbulence and political uncertainties continue to impact global currencies.

Read more at Yahoo Finance: Weak pound and yen shore up dollar, bonds and payrolls in focus