The dollar index fell but heading to record its third weekly gain

The dollar index fell during Friday’s trading, but it is heading to record its third weekly gain, benefiting from its strong rise throughout the week, with increasing expectations of a rate hike by the Federal Reserve.

The index is up 4% in the past three weeks, marking its biggest gain during this period since 2020, and is up about 1.4% this week so far, buoyed by US inflation data for June.

Expectations of an increase in US interest rates to more than 3.5 percent by next February increased, as inflation in the United States accelerated to 9.1 percent in June and reached its highest level since 1981.

Investors are looking forward to the US retail sales data later today, along with the US Consumer Sentiment reading from the University of Michigan, as the Federal Reserve official closely follows economic data as a key driver of this month’s interest rate decision.

The dollar index – which measures the performance of the US currency against a basket of six major currencies – fell 0.21% to 108.40 points, but it remains near its highest level since 2002.