Investing.com – The US dollar traded with small losses on Friday, but remained on track for weekly gains as traders reassessed potential interest rate cuts from the Federal Reserve in the wake of the strong employment report.
At 04:30 EST (08:30 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, fell 0.2% to 102.594.
Over the course of the week, the index is on track to advance by 0.4%, building on the previous week’s rise of more than 2%.
Producer price index data next
Demand for the dollar has been high since last week’s strong report, with traders largely ruling out the chance of another big interest rate cut by the Federal Reserve at its next meeting.
Although Thursday’s rise created some doubt about the health of the labor market, the rise in numbers reminded traders that inflation may still be an issue.
Data is due later in the session and is likely to show slight gains, but there is a degree of uncertainty after consumer price inflation was slightly stronger than expected in September.
Currently, bets on a quarter-percentage point rate cut on November 7 have increased to 83.3% from 80.3% the day before, with remaining odds for the policy remaining steady, according to CME Group (NASDAQ:).
The British economy is returning to growth
In Europe, the index rose 0.1% to 1.3068, after data showed that the British economy returned to growth in August after two consecutive months of no growth.
It rose 0.2% month-on-month in August, largely in line with expectations, and grew 1.0% compared to last year.
The British economy now appears on track to achieve economic growth for the third consecutive quarter. The Office for National Statistics said September GDP data would need to show a month-on-month decline of 0.3% to 0.6% to generate a flat quarterly reading, assuming there are no revisions to current figures.
The Federal Statistics Office said on Friday that the index rose 0.1% to 1.0944 after falling to 1.8% in September, confirming preliminary data.
With inflation in the euro zone’s largest economy now below the European Central Bank’s target, and growth stagnating, the ECB is widely expected to ease policy again next week, having cut interest rates twice already this year. .
“Although the arguments against a rate cut should not be dismissed outright, it will now take a great deal of courage from the ECB to stick with it, given that markets and consensus are fully in agreement on a 25 basis point cut,” analysts at ING said. “. Note.
Yuan gains ahead of briefing
The index fell 0.1% to 148.75, after approaching 150 yen earlier in the week, a level not seen before since August 2.
It fell 0.2% to 7.0672, with the yuan rising slightly ahead of an upcoming Finance Ministry press conference, where the government said it would outline plans for fiscal stimulus.
Analysts expect Beijing to identify at least 2 trillion yuan ($283 billion) in financial support, with the bulk of the amount targeted to support private consumption.