The dollar was on track to post a weekly gain against a basket of currencies, while the yen fell on Friday, ahead of a flurry of highly anticipated central bank meetings next week, including the Federal Reserve and Bank of Japan .
Japan’s largest companies agreed with unions on Friday to raise wages to the highest level in 33 years, strengthening views that the country’s central bank is poised to make a historic shift away from negative interest rates.
Investors are carefully watching decisions by other central banks for signs of how quickly they will cut interest rates after a period of rapid increases to curb runaway inflation. The Bank of England and the Swiss National Bank will also meet next week.
The dollar index is on track to break a three-week losing streak with a weekly gain of 0.6%.
While the Fed is not expected to change interest rates next week, warmer-than-expected U.S. producer and consumer price data this week have prompted investors to scale back bets on future cuts.
According to CME’s FedWatch tool, markets are now pricing in a 57% chance that the Fed will cut rates in June, up from 74% a week earlier.
“The Fed is likely to show more caution regarding the near-term inflation outlook,” currency analysts at MUFG said in a note.
The dollar index, which measures the U.S. currency’s performance against a basket of six currencies, rose 0.03% to 103.410.
The dollar rose 0.4% against the yen to 148.91 yen.
The euro traded at $1.08875, up 0.05% on the day.
The pound was quoted at $1.2745, down 0.07%.
Source: Terra
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