Dollar Falls on Easing Oil Prices, But Set for Weekly Gain

The US dollar fell on Friday as oil prices eased, but was poised for a second straight weekly advance due to growing rate hike bets. The dollar index slipped 0.34% and was on track for its biggest daily percentage drop since September 3, to 100.95.

Oil prices have cooled down after the potential for a truce between the US and Iran outweighed supply concerns from increasing attacks by Houthi fighters against Saudi Arabia. Despite this, oil remains above $100 a barrel, keeping upward pressure on inflation.

Eugene Epstein, head of trading and structured products at Moneycorp in Stamford, Connecticut, said the dollar's fall was just a 'breather' after its recent rally. He noted that market expectations for a more aggressive path of monetary policy have driven the dollar stronger overall.