The US dollar slipped on Friday but remained on track for a strong weekly gain, buoyed by expectations of U.S. economic resilience and fewer Federal Reserve rate cuts in 2025. The Dollar Index declined 0.3% to 108.900 after hitting a two-year high on Thursday, ending the week up around 1%—its best performance in over a month. Strong U.S. manufacturing data and a hawkish Fed outlook supported the greenback, with markets awaiting the monthly jobs report and the upcoming Fed meeting for further guidance. Meanwhile, the euro rebounded 0.4% after a sharp drop but faced a weekly decline of 1.5%, its worst since November, as weak eurozone manufacturing data and anticipated European Central Bank rate cuts weighed on sentiment. Similarly, the British pound recovered 0.3% on Friday but was still set for a 1.4% weekly loss amid expectations of Bank of England rate cuts in 2025. In Asia, the Chinese yuan slumped, with USD/CNY rising 0.8% to its highest level since 2023, following reports of potential PBOC rate cuts as China’s economy struggles to gain momentum. Despite the dollar’s slight retreat, it remains supported by robust U.S. economic fundamentals and cautious global monetary policies.
