According to Yahoo News, the dollar faced restraint on Friday due to uncertainty over the path of U.S. interest rates, while the euro maintained overnight gains as data suggested that the downturn in the euro zone may be easing. With U.S. markets closed on Thursday and a shorter trading session on Friday for Thanksgiving, currencies are expected to trade narrowly but with some volatility as liquidity is anticipated to remain thin. The dollar index, which measures the U.S. currency with six peers, eased 0.029% to 103.73, staying close to the two-and-a-half month low of 103.17 it touched earlier this week.
The index is down 2.8% for the month, on track for its weakest monthly performance in a year due to rising expectations that the Federal Reserve is done raising interest rates and could start cutting rates next year. Markets have dialed back expectations of Fed rate cuts in 2024, with futures now showing a 26% chance that the Fed cuts its target rate at the March 2024 policy meeting, according to CME Group's FedWatch tool. This compares with a 33% chance last week. The euro stood at $1.0904, having risen 0.16% overnight after a series of preliminary surveys showed recession in Germany may be shallower than expected, which offset a downbeat reading of French business activity.