The US dollar was little changed during Friday's trading ahead of the monthly US employment report, but remained on track to post a weekly gain against major currencies as uncertainty persisted over the prospects for a peace agreement with Iran.

In trading, the US Dollar Index, which measures the greenback against a basket of six major currencies including the euro, yen, and sterling, edged up to 99.975. The index is up 0.17% this week after falling 1.6% in the previous week.

The dollar was steady against the yen at 158.43 after gaining 0.4% on Thursday. The pair is on track to rise about 0.5% for the week after recovering from a wave of coordinated Japanese-US intervention that pushed it down from near a four-decade high above 163 to a 13-week low of 155.20 on Monday.

The dollar was also little changed against the euro, with the single currency trading at $1.1518, while sterling stood at $1.3444.

Investors are awaiting the US nonfarm payrolls report for further clues on the Federal Reserve's interest rate outlook as markets continue to assess the likelihood of another rate hike.

Economists expect the US economy to have added around 80,000 jobs last month, up from 57,000 in June, while the unemployment rate is forecast to remain unchanged at 4.2%.

Iran talks

Tensions in the Gulf remain elevated after reports suggested that a proposed agreement between Iran and Oman aimed at helping end the conflict between Washington and Tehran could give Iran control over inbound shipping through the Strait of Hormuz.

US President Donald Trump has said that an agreement to reopen the strait is close, although US officials have repeatedly stressed that Washington would not accept giving Iran control over access to the world's most important energy shipping route.

Heightened inflation risks have also weighed on US Treasury bonds, pushing yields higher.

Analysts also pointed to a Financial Times report citing people close to Federal Reserve Chair Kevin Warsh as saying that a September interest rate hike remains a possibility, depending on incoming economic data.