Dollar Tumbles but Remains Poised for Weekly Gain Amid Rate Hike Bets

The US dollar fell on Friday as oil prices cooled down, but it's still poised for its second straight weekly gain due to growing expectations of rate hikes. The dollar index dropped by 0.34% and was on track for its biggest daily percentage drop since September 3. This comes despite rising inflation concerns and higher bond yields.

Oil prices have eased as a potential truce between the US and Iran outweighed supply concerns from increasing attacks by Houthi fighters against Saudi Arabia. However, they remain above $100 a barrel, which continues to put upward pressure on inflation.

Eugene Epstein, head of trading and structured products at Moneycorp in Stamford, Connecticut, said that 'we've had like a pretty aggressive rally in the dollar over the last couple of days and maybe it's a little stretched, just taking a little breather.'