The U.S. dollar edged higher Wednesday, with this safe haven helped by the fragile nature of global confidence, although gains are limited ahead of the release of the much-anticipated delayed U.S. jobs report.

At 04:15 ET (09:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 99.552, close to a one-week high.

Dollar helped by risk-off stance
Global equity markets have been hit hard this week amid concerns about valuations of artificial intelligence-linked stocks, and this has seen demand for U.S. Treasury bonds and thus the dollar.

Investors remain very nervous, and the release of Nvidia's (NASDAQ:NVDA) results after the close is likely to drive sentiment over the near term given its importance in the AI trade.

"The magnificent seven tech stocks are around 7% off their highs – a drop in the ocean compared to the 70% rally since April. But the understandable fear is that this is a very crowded trade and that a casual walk to the exit could turn into something less orderly should cause be found," said analysts at ING, in a note.

Adding to the concerns are signs of an economic slowdown, with initial jobless claims data on Tuesday showing the number of Americans on jobless benefits surged between mid-September and mid-October.

The September U.S. nonfarm payrolls report, postponed due to last month's government shutdown, is scheduled for release on Thursday.

Market participants are watching closely for signals on labor market strength and wage pressures, with a weaker-than-expected reading likely boosting expectations for a Federal Reserve rate cut.

"Tomorrow's release of the delayed September jobs report will probably be the best chance for the dollar to go lower this week," said ING. "Should the jobs data fail to swing the market towards a Fed cut in December (currently 50% priced), then pressure remains on equity markets."

Source: Investing.com