Dollar Slips Amid Fading Rate Hike Bets

The US dollar fell on Friday but was still set to post its second consecutive weekly gain due to rising rate hike bets. The euro and sterling rose, but remained close to their respective lows as energy prices declined.

Ongoing concerns around the US fiscal position and unpredictable US policy making have limited the dollar's ability to rally further, despite increasing yields.

The yen strengthened after Japan reaffirmed its commitment to a joint intervention stance with the US. However, it was still on track for a second weekly fall due to markets judging the Bank of Japan's rate hike as insufficiently hawkish.