New Delhi, Jan. 9 -- The U.S. dollar hovered near a one-month high on foreign exchange markets Friday as investors looked to both a key reading of the domestic labor market and a crucial ruling on tariffs to define the greenback's direction into the coming months.

The Bureau of Labor Statistics will publish the U.S. employment report for December prior to the market open, with economists looking for a jobs gain of around 70,000 and a dip in the unemployment rate to 4.5%.

The reading isn't likely to trigger an immediate reaction from the Federal Reserve, however, even though the central bank sees a weakening labor market as a risk that could outweigh stubbornly high inflation. That view has kept the central bank from committing to deeper...