Dollar Steadies Amid Dovish Fed Comments, Rate Hike Bets Cool

The US dollar has held steady on Friday, but remains on track for a weekly decline of 0.7% as dovish commentary from Federal Reserve leaders offsets earlier hawkish rhetoric.

Fed Governor Christopher Waller's comments on Thursday signaled that recent macroeconomic data shows encouraging signs of disinflation, and if upcoming reports reinforce this trend, he would favor keeping borrowing costs unchanged at the central bank's September 15-16 policy meeting.

This shift in tone has cooled rate hike bets, with financial futures scaling back the probability of a 25-basis-point Fed rate hike this month to approximately 50%, down sharply from 63% earlier in the week and nearly 68% at its peak.