NEW YORK- The US dollar rose against a broad range of currencies on Friday including the euro, sterling and those tied to commodities such as the Australian dollar, as investors consolidated positions ahead of the weekend, looked to more inflation data next week and kept an eye on tariff headlines.
“The greenback is undergoing a technical rebound after suffering a sustained selloff in recent weeks, and other currencies are also seeing risk discounts come back as trade worries return,” said Karl Schamotta, chief market strategist, at Corpay in Toronto.
The dollar, however, pared gains after S&P Global data on Friday showing US business activity dropped to a 17-month low this month. It fell again after declines seen in the University of Michigan sentiment report and US existing home sales data.
The reports kept the prospect of interest rate cuts by the Federal Reserve intact this year, even though the Fed will remain on hold for the next several months.
US rate futures on Friday priced in 44 basis points (bps) of easing this year, compared with 38 bps on Thursday, according to LSEG calculations. The Fed could likely resume cutting interest rates again either at the September or October policy meeting, LSEG data showed.
Markets will next look to the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation measure, due for release a week from now for more confirmation of the central bank’s rate path.
