NEW YORK: The US dollar was little changed against major currencies on Friday as markets digested a slew of economic data that supported the Federal Reserve’s current monetary policy path, while a rise in British economic growth could not lift the pound from one-month lows.
A gauge of US wholesale prices was unchanged in September, the Labor Department reported on Friday, the latest economic data to indicate the Fed will likely cut rates again next month. Consumer prices in September rose 0.3%, according to data released on Thursday, slightly hotter than expected, while weekly jobless claims figures surged, pointing to labor market weakness.
The weekly jobless claims data was skewed by Hurricane Helene. Next week’s data will be affected by Hurricane Milton.
Moves were fairly muted across major currencies. The euro was flat at $1.10938, the pound was up 0.08% at $1.3071, while the dollar was up 0.34% against the Japanese yen at 149.11.
As a result, the dollar index was flat at 102.89, taking a breather after a recent steady climb that took it above 103 on Thursday, its highest since mid-August on the back of traders reducing bets on further jumbo interest rate cuts by the Federal Reserve at its remaining meetings this year.
“The market is satisfied because there’s nothing there that really tells against the narrative that the Fed is cutting; the only debate is how fast they’re going to cut,” said Steven Englander, head of Global G10 FX Research at Standard Chartered in New York.
“Overall, the data have been slightly encouraging to that narrative and none of the data have been discouraging to the narrative that the Fed is cutting rates.”
Britain’s economy grew in August after two consecutive months of stagnation, providing some relief to finance minister Rachel Reeves ahead of the new Labour government’s first budget later this month.
However, in addition to being broadly steady on the dollar the pound was little changed on the euro at 83.67 pence to the common currency.
Traders are also watching French politics, after the government on Thursday delivered its 2025 budget with plans for 60 billion euros ($65.5 billion) worth of spending cuts and tax hikes on the wealthy and big companies to tackle a soaring fiscal deficit.
The budget is unlikely to pass until December, as French Prime Minister Michel Barnier and his allies in President Emmanuel Macron’s camp lack a majority by a sizeable margin and will have little choice but to accept numerous concessions.
Markets are also awaiting a news conference from China’s finance ministry on fiscal policy on Saturday. The Chinese yuan strengthened 0.17% against the greenback to 7.071 per dollar. The Australian dollar strengthened 0.04% versus the greenback to $0.6742, while the New Zealand dollar was at $0.61 after the central bank on Wednesday slashed rates by a half point and hinted at further cuts to come.
In cryptocurrencies, bitcoin gained 3.43% to $61,771.00. Ethereum rose 2.74% to $2,431.10.