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At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded largely unchanged at 104.127.
The dollar found some support from data showing the U.S. economy expanded faster than expected and inflation slowed in the second quarter.
The reading pushed up hopes that the U.S. economy was headed for a soft landing, where growth will remain steady while inflation eases.
However, the dollar gains were limited, with U.S. macro not the only driver in the foreign exchange markets these days.
“The fallout of the tech sell-off, frontloaded US election positioning, and the unwinding of carry trades have generated moves large enough in magnitude to out shadow U.S. data,” said analysts at ING, in a note.
That said, the focus Friday is now squarely on PCE price index data, due later in the session, which is expected to show inflation eased further in June, keeping intact expectations for a September cut.
In Europe, EUR/USD edged marginally higher to 1.0845, after data showed that consumers in the eurozone stopped reducing their inflation expectations in June after four consecutive monthly falls.
The ECB’s Consumer Expectations Survey showed the median consumer expected inflation to average 2.8% over the next 12 months, stable from May after a steady fall from 3.3% in January.
The ECB cut interest rates in June and is widely expected to do so again in September, but the policymakers would undoubtedly prefer these expectations to continue to fall as they loosen monetary policy.
GBP/USD traded 0.2% higher at 1.2870, but well below the one-year high of 1.3044 hit last week.
The Bank of England meets next week, and while markets are anticipating around 50 bps of cuts this year, there remains a great deal of uncertainty over whether the policymakers will agree to rate cut then or delay until September.
In Asia, USD/JPY rose 0.2% to 154.25, with the yen’s recent advance somewhat stalled by soft inflation from Tokyo, which showed inflation remained largely muted in July.
The soft inflation reading came just days before a Bank of Japan meeting, with analysts split over whether the central bank will have enough headroom to hike interest rates by 10 basis points.
However, the yen was on track for a 2.5% rise for the week, its biggest weekly gain since late April-early May, after suspected intervention boosted the currency.
USD/CNY rose 0.3% to 7.2520, with the yuan retreating after suspected intervention by the Chinese government saw the currency appreciate sharply against the dollar on Thursday.
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