On Friday, the dollar reached its highest level versus other major currencies, marking the end of a five-week losing run on declining expectations on a significant US interest rate cut based on economic data.
Against the dollar, the euro maintained almost a two-week low while declining inflation in Germany and Spain raised the likelihood of European Central Bank monetary policy easing.
After declining on Thursday, the yen stayed constant close to 145 against the dollar as the currency tracked an increase in U.S. Treasury yields.
Though another measure excluding energy costs rose barely 1.6 percent, the Japanese currency mostly ignored data on Friday showing core consumer prices in Tokyo rose at a faster-than-expected 2.4 percent in August, once more over the 2 percent objective of the Bank of Japan.
Based on U.S. data, gross domestic product increased in the second quarter at an annual pace of 3 percent—a revised estimate as compared to the 2.8 percent rate revealed last month.
Reuters’s poll of economists revealed no change in GDP growth expectation.
The CME FedWatch tool shows traders now expect a quarter-point rate decrease on September 18; the odds of a 50 basis point cut are now just 34 percent, down from 38 percent a day earlier.
After climbing 0.36 percent on Tuesday to reach its best since Aug. 22 at 101.58, the dollar index, which gauges the greenback against a basket of six major currencies, changed little at 101.34 by 0032 GMT.
This week the index is predicted to increase 0.66 percent, ending a five-week losing run and marking its highest week since early August.
But in August, the index is predicted to lose 2.6 percent on a monthly basis, which would be its lowest month since November last year.
Rising to 145.55 yen overnight for the first time since Aug. 23, the dollar dropped 0.14 percent to 144.78 yen.
Little altered the euro at $1.1082; on Thursday it dropped to $1.1055. Later in the day, Europe—including France, Italy, and the euro zone overall—is due additional inflation numbers.
The Federal Reserve’s favoured indicator of inflation, core personal consumption expenditure price index data, will also be published by the US.
After declining to $1.3146 overnight for the first time since August 23, the pound was stable at $1.31655.
