Dollar Steady After Volatile Week; CPI data is high by Investing.com

Investing.com – The U.S. dollar steadied on Friday, trading near a one-month high as stronger-than-U.S. jobless claims eased fears of a looming recession in the world’s largest economy .

At 04:15 ET (09:15 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, traded largely unchanged at 103,007, not far from levels seen ahead of Friday’s labor market release .

The dollar settles after a volatile week

for the state, jobless claims fell by 17,000 to a seasonally adjusted 233,000 for the week ended Aug. 3, data showed Thursday, the biggest drop in about 11 months.

That helped ease fears that the US economy was headed for a hard landing and that the Federal Reserve was behind the curve with its decision not to cut rates late last month.

“Yesterday’s abnormally strong reaction to the jobless claims numbers was evidence of extremely high market sensitivity to all sorts of indications of the US macro outlook at the moment,” analysts at ING said in a now .

Attention will turn next week to the latest edition of consumer prices as traders look for more guidance on likely future Fed actions.

“We can reasonably expect the market reaction to next week’s US core numbers to be significant even for small deviations (to the second decimal of a percentage point) from the 0.2% monthly consensus,” it added Eng.

The odds that the Federal Reserve will cut interest rates by 50 basis points at its next policy meeting are currently just over 50%, according to CME Group’s (NASDAQ: ) FedWatch tool, with a 25 basis point cut considered now as having a 46% probability.

Italian consumer prices fell in July

In Europe, it fell slightly to 1.0917 after rising to 1.1009 for the first time since January 2 earlier in the week.

They started cutting interest rates in June and many expect policymakers to agree to another cut in September.

it fell 0.9% month-on-month in July and rose 1.6% year-on-year, suggesting inflationary pressures were contained in the eurozone’s third-largest economy.

rose 0.2% to 1.2768, extending a 0.5% gain overnight that brought it back from a more than one-month low.

However, it remains on track for small losses this week, which would be its fourth straight week of declines.

USD/JPY trades above lows

In Asia, it fell 0.1 percent to 147.20, but was trading well above lows of around 141.60 hit earlier in the week.

The yen’s turnaround came as BOJ officials said they would not raise interest rates amid market volatility, tempering the central bank’s dovish message during a meeting in late July.

But despite weakening this week, the yen continued to enjoy stellar gains against the dollar over the past month, especially as global freight trade began to ease.

fell to 7.1739 as the yuan was helped by data showing Chinese people grew more than expected in July, while inflation fell slightly less than expected.