Dollar Falls as Oil Prices Cool, Yen Rallies on US-Japan Commitment

The US dollar fell on Friday but was still set for its second consecutive weekly gain due to rising rate hike bets. The euro rose 0.2% to $1.141 as energy prices decreased, moderating wagers on Federal Reserve rate increases.

However, the euro is on track for a third weekly decline after touching a two-month low on Thursday. Sterling rose 0.3% to $1.326, boosted by hawkish comments from Bank of England Governor Andrew Bailey.

The dollar index, which measures the US currency against a basket of peers, climbed to a two-month high on Thursday and was set for its first back-to-back weekly increase since June. However, it gave back some of its recent gains and fell 0.3% on Friday to 100.96.

Khoon Goh, head of Asia research at ANZ, said that whilst the dollar should get a bid from higher yields, there are still ongoing concerns around the US fiscal position and the unpredictability of US policy making.