The dollar index was little changed around 101.6 on Friday, hovering near a three-week low and down nearly 0.2% for the week. Cautious sentiment persisted amid further gains in oil prices and fears of a possible escalation of conflict in the Middle East, with the US midterm elections now less than two weeks away. At the same time, worries about heavy AI-related spending continued to pressure risk appetite.
The Federal Reserve is due to announce its monetary policy decision next week, with markets assigning roughly a 91% probability that rates will remain unchanged. In contrast, the likelihood of a 25 bps rate hike in December was estimated at around 76%.
Among major currencies, the Japanese yen strengthened against the dollar, supported by its safe-haven status. The euro, by contrast, edged lower, weighed down by political uncertainty in France and persistent selling pressure in the country’s bond market.
