It is currently down 0.58% for the week, the biggest weekly drop since early April

The U.S. dollar was on track for the biggest ​weekly drop in nearly three months on Friday, after a tepid June jobs report pushed back ‌markets expectations for central bank rate hike, providing some relief for the embattled yen.

Softness in the U.S. currency continued in early Asian trade, with the euro hovering near its two-week high at $1.1442.

The dollar index was 0.2% lower at 100.77 after a 0.5% decline on ​Thursday. It is currently down 0.58% for the week, the biggest weekly drop since early April.

The Japanese yen last traded ​at 161.01 per dollar ⁠after rallying nearly 1% in the previous session, lifting the currency from multi decade-lows as the dollar wobbled.

The risk-sensitive Australian dollar fetched $0.6935, set to snap a four-week losing streak. New Zealand dollar ​traded at $0.5702, up 1.2% for the week.

U.S. job growth cooled sharply in ​June, with nonfarm payrolls increasing by 57,000 in June, well below expectations for a 110,000 rise. The labour force participation rate dropped to 61.5%, a more than 5-year low.

That has prompted traders to dial back expectations for a near-term interest rate increase from the central bank, ​with markets now pricing in a 52% chance for a hike at the September meeting, according to CME FedWatch, ​down from 64% in the prior session.

U.S. Treasury yields also pulled back from earlier highs, with those on interest rate-sensitive two year notes ‌snapping a ⁠three-day streak of gains with a 4 basis-point drop.

At the margin, it is dovish, helping to ease concerns about labour market overheating and the need for more aggressive policy tightening, said Sim Moh Siong, FX strategist at OCBC.

However, the broader outlook remains constructive for the dollar, particularly against low-yielding currencies, as long as Fed tightening expectations stay intact, he added.