Dollar Set for Weekly Gain

The dollar index steadied around 101.5 on Friday after coming under pressure in the previous session, but remained on track for a weekly gain as markets continued to expect the Federal Reserve to raise interest rates later this year. On Thursday, the greenback weakened after the latest US PCE inflation report came in broadly in line with expectations. Although inflation remains well above the Fed’s 2% target, the data helped ease concerns about a sharper-than-anticipated pickup in price pressures. Even so, markets are pricing in an 80% chance of a Fed rate hike in December following last week’s hawkish pause, while the probability of a September increase stands at around 63%. New York Fed President John Williams also said on Thursday that inflationary pressures are likely to moderate this year but remain uncomfortably high.