The US dollar was little changed on Friday but remained on track for a weekly decline of around 0.7%, as investors waited for US payrolls data and next week’s inflation figures for clues on the Federal Reserve’s interest rate path.
The dollar index, which tracks the greenback against a basket of major currencies, was flat at 99.01. The euro was also little changed at US$1.1625 while sterling stood at US$1.3527.
Markets are focused on Friday’s US nonfarm payrolls report ahead of the Federal Open Market Committee’s September 15 to 16 meeting, followed by consumer price inflation data next week.
Fed Governor Christopher Waller said on Thursday that he was leaning towards keeping interest rates unchanged this month if upcoming inflation data showed price pressures continuing to moderate.
His comments prompted traders to pare back expectations of a September rate hike, with the implied probability of a move falling back to around 50%.
The shift in rate expectations has weighed on the dollar, while the yen has strengthened sharply as markets simultaneously increase bets that the BOJ could continue raising rates.
Investors are also keeping an eye on geopolitical tensions in the Gulf and their potential impact on inflation. Brent crude futures remained elevated above US$95.52 a barrel following US strikes on Iran this week.
Elsewhere, the New Zealand dollar rose 0.2% to US$0.5892 after the Reserve Bank of New Zealand raised its cash rate by 25 basis points to 2.75% on Wednesday and signalled further tightening ahead.
The Australian dollar added 0.1% to US$0.7206, while bitcoin fell 0.3% to US$80,995.51.
Reuters
