Dollar set for weekly fall on economic worries

The dollar index hovered around 99.2 on Friday, poised for a second consecutive weekly decline amid concerns that a backlog of US data following the government reopening could reveal a slowing economy.

The greenback’s recent drop coincided with a selloff in US stocks and bonds, reflecting weakening confidence in American assets amid heightened uncertainty.

President Donald Trump signed a short term funding bill this week that ended the longest US government shutdown in history, clearing the way for a backlog of economic reports.

However, the White House said some October figures may never be released as certain agencies could not collect data during the shutdown, adding to uncertainty.

Markets have also trimmed bets on a Federal Reserve rate cut in December, now pricing in roughly a 50% chance of a 25 bps reduction versus over 95% a month ago, though expectations for cuts next year remain intact.