The dollar edged lower on Friday as investors continued to bet that U.S. interest rates have peaked. Meanwhile, the yen firmed after data showed Japan’s core inflation accelerated, reinforcing expectations the Bank of Japan may soon roll back stimulus.
The dollar index, measuring the greenback against six major peers, eased 0.077% to 103.69. It is down 2.8% for November, on track for its biggest monthly drop in a year amid growing convictions that the Federal Reserve is finished hiking rates and may cut them in 2024.
Markets have pared back forecasts for Fed cuts next year. Analysts say the Fed, ECB and BoE will likely reduce rates around mid-2024.
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Gold trades sideways amid thin volumes
The yen steadied at 149.58 per dollar after Japan reported a modest pickup in core consumer price growth, fueling views that stubborn inflation may prompt the BOJ to tighten policy.
The euro edged up 0.05% to $1.0911 following data confirming Germany’s economy contracted slightly last quarter. The figures suggest recession may be milder than feared.
Sterling was little changed at $1.2541 ahead of a shortened U.S. session.
