Dollar to End the Week Higher
The dollar index edged slightly lower below 98 on Friday but remained close to the two-week highs reached earlier in the week and was on track to end the first week of February up nearly 0.9%.
The greenback drew support from its safe-haven appeal throughout the week, particularly on Thursday, when weaker-than-expected US labour data raised concerns about the health of the economy and, alongside a tech sell-off and a sharp decline in crypto assets, triggered a flight to safety. Sentiment improved on Friday amid a rebound in tech stocks and preliminary data showing that the University of Michigan consumer sentiment index unexpectedly climbed to a six-month high.
Looking ahead, investors will turn their attention to the delayed US jobs report and the CPI release next week for further clues on the Fed’s outlook. Markets are currently pricing in around 58bps of Fed rate cuts this year, up from about 50bps earlier in the week. The dollar weakened mainly against the pound and the Aussie.
Source: Tradingeconomics.com
