Investing.com – The U.S. dollar held steady Friday, trading near a one-month high, after stronger jobless claims than the U.S. eased fears of a looming recession in the world’s largest economy.
At 04:15 ET (09:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading largely unchanged at 103.007, not far from levels before Friday’s labor market release.
Dollar stable after volatile week
state unemployment benefits fell 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, data showed on Thursday, the biggest drop in about 11 months.
This helped allay fears that the US economy was heading for a hard landing and that the Federal Reserve was falling behind in its decision not to cut interest rates late last month.
“The abnormally large reaction to the unemployment benefits data yesterday was evidence of the markets’ extremely high sensitivity to a variety of indications about the US macro outlook at the moment,” ING analysts said in a note now.
Next week, attention will turn to the latest consumer price release as traders look for more guidance on the Fed’s likely future actions.
“We can reasonably expect the market reaction to next week’s US fundamentals to be significant, even with small (second decimal of a percentage point) deviations from the 0.2% MoM consensus,” ING said.
According to the CME Group (NASDAQ:) FedWatch Tool, the chance that the Federal Reserve will cut rates by 50 basis points at its next policy meeting is currently just above 50%. A cut of 25 basis points is now seen as a cut of 46%. probability.
Italian consumer prices fell in July
In Europe, the index fell slightly to 1.0917 after rising to 1.1009 at the start of the week for the first time since January 2.
They started cutting interest rates in June, and many expect policymakers to agree to another cut in September.
fell 0.9% month-on-month in July and rose 1.6% year-on-year, suggesting that inflationary pressures in the eurozone’s third-largest economy were contained.
rose 0.2% to 1.2768, extending its 0.5% overnight rally that pulled the stock back from a more than a month low.
However, it remained on track for small losses this week, which would mark a fourth straight week of declines.
USD/JPY is trading above lows
In Asia, the index fell 0.1% to 147.20, but traded well above its low of around 141.60 earlier this week.
The yen’s reversal came as BOJ officials said they would not raise rates amid market volatility, tempering an hawkish message from the central bank at a meeting in late July.
But despite weakening this week, the yen still enjoyed tremendous gains against the dollar over the past month, especially as the global carry trade began to weaken.
fell to 7.1739, with the yuan helped by data showing Chinese growth in July was more than expected, while inflation fell slightly less than expected.
