The US Dollar weakened against several major currencies on Friday as markets scaled back expectations of a Federal Reserve interest rate increase in September. The USD index traded near the lower end of the 99.50–100.00 range, influenced by softer US Consumer Price Index (CPI) and Producer Price Index (PPI) data, which lowered the implied odds of a rate hike, according to FX Street.
The Swiss Franc recovered from two-week lows while the British Pound gained 0.35%, reaching around 1.3533 against the US Dollar during the European session. Meanwhile, the New Zealand Dollar also appreciated as the greenback struggled. Gold prices rebounded after touching a fresh weekly low of $4,311, reflecting broader market adjustments to the changing interest rate outlook.
Elias Haddad of Brown Brothers Harriman highlighted the impact of the recent US inflation figures on the Fed’s policy expectations and the resultant USD index fluctuations. For Japanese investors, these developments underscore the importance of closely monitoring US inflation trends and Fed signals, as they directly influence currency volatility and cross-border investment strategies.