Dollar declined after Friday's nonfarm payroll data

Dollar heads for a weekly gain

On Friday, the dollar was little changed against key rivals, but it remained on course for its best week in four as investors evaluated the benefits of tighter Fed policy against the risks of a US recession.

The dollar index, which measures the currency against six peers, rose 0.07 percent in Asian trading after falling 0.32 percent overnight due to weaker-than-expected consumer spending statistics.

This week, it has gained 0.66 percent in a complex push and pulls as fears of a worldwide downturn bolstered the greenback’s allure as a haven. The market will be looking for signs of weakening in the United States’ ISM manufacturing statistics, which are coming later in the day.

The European Central Bank is expected to raise interest rates for the first time in a decade this month, though experts are split on any increase. Markets will be looking for eurozone inflation statistics later in the day to get a better idea of how aggressive the ECB will be.

The euro fell 0.16 percent to $1.0469 on Friday after rallying 0.39 percent on Thursday to a two-week low of $1.0381 due to the dollar weakening.

It is down 0.86 percent for the week, with investors viewing Europe’s economic situation as more fragile than that of the United States, exacerbated by an energy crisis exacerbated by the war in Ukraine.

The risk-sensitive Australian dollar fell 0.26 percent, trading at $0.6885. This week, it has dropped 0.81 percent.

The Reserve Bank of Australia announces its policy on Thursday, and markets anticipate a half-point increase in the main rate. However, this has not aided the Australian dollar, which has instead tracked commodity prices lower as the global economic outlook deteriorates. For the time being, Western countries’ weaponization of foreign currency holdings, which froze Russian assets after Moscow invaded Ukraine, does not appear to have alarmed reserve managers. Many people may even increase their holdings of US dollars.

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