First Brands Group debt targeted by Apollo Global Management - report
Investing.com - The U.S. dollar edged higher Friday, but was on track for a losing week as weak employment data and benign consumer price increases kept traders expecting a Federal Reserve interest rate cut next week.
At 04:25 ET (08:25 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 97.680, but was still on course for a weekly loss of around 0.1%
Dollar set for weekly loss
Expectations that the Federal Reserve will cut interest rates when it meets next week have grown after the release of a modest tick up in consumer prices as well as a surge in U.S. jobless claims.
The U.S. CPI for August showed prices rising at the fastest pace in seven months, but this was broadly in line with expectations.
Additionally, data was released Thursday showing the biggest weekly increase in the number of Americans filing new applications for jobless benefits in four years.
According to Fed fund futures, the market expects the Fed to cut its key interest rate by 25 basis points on September 17.
“We expect dollar weakening as the Fed starts cutting, even if now priced in, as cheaper funding costs can further encourage USD selling for hedging purposes,” said analysts at ING, in a note.
“Today, we’ll see the University of Michigan surveys, keeping a close eye on inflation expectations, which currently stand at 4.8% for the year-ahead and 3.5% for 5-10 years. The balance of risks for the dollar remains tilted to the downside.”
French political uncertainty weighs on euro
In Europe, EUR/USD rose 0.1% to 1.1740 after the European Central Bank kept its key interest rate on hold at 2% for a second straight meeting, while the policymakers sounded sanguine about the economic outlook.
“All in all, the implicit message to markets was that there are no reasons to keep pricing in additional rate cuts as things stand. Indeed, the implied probability of further easing dropped below 50% after Lagarde’s presser, offering strong rate-driven backing to the euro rally,” said ING.
“While we wouldn’t fully rule out a resurgence of dovish sentiment – especially as tariffs, a strong euro, and geopolitical or sovereign debt risks may prompt future action – our baseline view remains aligned with market expectations: the ECB is done cutting rates.”
GBP/USD traded 0.2% lower to 1.3545, after data showed U.K. July gross domestic product came in flat, with growth stagnating following a relatively robust first half of 2025, during which the British economy expanded by 0.7% in the first quarter and 0.3% in the second.
According to data released Friday by the Office for National Statistics, the economy registered no growth in July, easing from the 0.4% expansion recorded in June.
Yen has volatile week
Elsewhere, USD/JPY gained 0.1% to 147.36, with the pair trading marginally lower this week, after whipsawing sharply in the wake of Prime Minister Shigeru Ishiba’s abrupt resignation earlier this week.
USD/CNY traded marginally higher to 7.1210, with the pair a touch lower this week. While the yuan recently hit near 10-month highs on strong policy support from Beijing, middling trade and inflation data released this week raised more concerns over a cooling Chinese economy.
AUD/USD traded marginally higher at 0.6660, and the Aussie dollar was up 1.7% this week, as it took support from stronger commodity prices, especially metals.