Traders are positioning ahead of Friday's US nonfarm payrolls report, driving up one-day hedging costs across major currencies.

Euro-dollar overnight volatility climbed as much as 526 basis points to 11.58%, the highest level since July 29; the gauge is on track for its strongest close since early March.

Sterling-dollar corresponding volatility rose 479 basis points to 11.52%, the second-highest level since late July, and may post its highest close since May.

Dollar-Swiss franc volatility stood at 12.12%, on pace for a seven-month closing high.

Traders are focused on the nonfarm payrolls data, which is the key basis for judging whether the market is pricing in a Federal Reserve rate hike this month; the current probability of a hike is 36%, down from around 56% after the US PCE inflation data came in below expectations.

One-day expiry options also cover the US ISM manufacturing index and euro area CPI data.