Overview
- The dollar index fell 0.19% Friday as a broad equity rally reduced safe-haven and liquidity demand for the currency.
- Despite the intraday decline, the gauge was about 0.5% higher for the week, on pace for its largest weekly gain since early January.
- University of Michigan sentiment rose to 57.3 and 1-year inflation expectations fell to 3.5%, helping limit losses alongside hawkish remarks from Raphael Bostic and Philip Jefferson.
- Swaps priced roughly a 19% chance of a 25-basis-point cut at the March Fed meeting, reflecting only a small probability despite softer labor signals earlier in the week.
- The yen slipped to around 157 per dollar and was headed for its worst week since October ahead of Sunday’s election, where prospects for fiscal expansion under Sanae Takaichi kept investors cautious; gold advanced as the dollar eased.