The dollar index held just below 99 on Friday after sliding sharply in the previous session, as traders scaled back expectations for a Federal Reserve rate hike this month following dovish comments from a central bank official.
Fed Governor Christopher Waller said he would support keeping rates unchanged if price pressures continue to ease, adding that his next policy decision will depend heavily on August inflation data due next week.
Traders now see roughly a 50% probability of a September rate hike, down from about 63% a day earlier.
Investors are also awaiting Friday’s August jobs report for further clues on the Fed’s policy outlook.
The dollar also faced pressure from the surging yen as traders watched for signs of intervention while assessing the prospects for more aggressive policy tightening by the Bank of Japan this year.
For the week, the dollar index is on track to decline about 0.7%.
