Dollar stabilizes ahead of US producer price data release

The dollar stabilized against major currencies on Friday as worries about the performance of the US economy returned, and ahead of the release of producer price index data later in the day and the Federal Reserve meeting on decide on interest rates next week.
Investors are eagerly awaiting a series of interest rate decisions by central banks next week, including the Federal Reserve, the European Central Bank and the Bank of England.
Markets are betting the three will slow the pace of interest rate hikes by 0.5 percentage point increments, as policymakers continue to push to accelerate growth through monetary tightening to curb rising inflation .
US producer price inflation data, due for release at 13:30 GMT, is being watched for indications of a slowing pace of interest rate hikes, ahead of the release of consumer price data on Tuesday.
Thursday’s data showed that weekly jobless claims rose at a moderate pace, adding to investor nervousness about the outlook.
The dollar index, which measures the greenback’s performance against a basket of six major currencies, was little changed at 104.780.
The index is still up about 9.5% this year so far, but fell more than 6% in the fourth quarter, reflecting pessimistic expectations about inflation and interest rates.
And the euro settled against the dollar at $1.05555, close to the highest level in six months it recorded this week, heading for gains for the third straight week.
There was little change in the pound on Friday at $1.22460; That’s not far from the six-month high of $1.2345 reached on Monday as the government unveiled reforms aimed at preserving London as one of the world’s most competitive financial centres.
While the Japanese yen jumped 0.7%, and rose 0.3% on late trading to 136.280.
(Reuters)