Investing.com – The US dollar was steady on Friday after losing ground the previous session on weak jobs data, while the pound rose in the wake of stronger-than-expected growth data.
At 04:10 ET (08:10 GMT), the Dollar Index, which tracks the dollar against a basket of six other currencies, was trading just higher at 105.115.
Dollar on track for small gains this week
The dollar stabilized on Friday and is heading for small gains this week after Thursday’s losses following the data release saw a bigger-than-expected rise in the weekly j.
This evidence of a cooling US labor market reinforced some expectations that US interest rates would start cutting from September.
However, persistent inflation remains a major point of contention for the Fed, and a slew of officials warned about it this week, comments that boosted the dollar this week.
There is “considerable” uncertainty about where U.S. inflation will go in the coming months, Mary Daly, president of the San Francisco Federal Reserve, said Thursday.
“In a scenario where inflation remains at the same level and does not make much progress, it is not appropriate to adjust inflation unless we see the labor market faltering,” she added.
These comments put the spotlight on the upcoming data, due next week, for more signals on interest rates.
The pound sterling is benefiting from strong growth figures
In Europe, the economy rose 0.1% to 1.2534, recovering on Thursday from the lowest level since April 24, after data released earlier Friday showed the UK economy grew by the most in almost three years.
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Britain grew 0.6% in the three months to March, the strongest growth since the fourth quarter of 2021, as the country’s economy emerged from the shallow recession it entered in the second half of last year ended up.
On a monthly basis, the economy grew by 0.4% in March, faster than the 0.1% growth forecast.
Rates were held at a 16-year high on Thursday, but two members of the nine-member Monetary Policy Committee voted in favor of a cut, suggesting the central bank is moving toward such a cut.
Trading largely unchanged at 1.0783, with a light data calendar providing little impetus.
She has all but promised a rate cut on June 6, but there is uncertainty over how many further cuts the central bank will approve this year.
Pierre Wunsch, the governor of the Belgian central bank, argued for further steps earlier this week, arguing that remaining tight for too long is now a greater risk than easing too early.
Markets are currently pricing in 70 basis points of rate hikes this year.
USD/JPY rises higher
In Asia, the price rose 0.2% to 155.70, well above the low of 152 earlier in May.
Traders now see the 160 level as the new line in the sand for Japanese government intervention.
rose 0.1% to 7.2249, with the yuan weakening after reports that US President Joe Biden was considering imposing new sanctions on certain Chinese industries such as electric vehicles and batteries.
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While the economic impact of the tariffs was unclear, such measures could provoke retaliation from China, further deteriorating ties between the world’s two largest economies.
