25.09.202601:54:42UTC+00Dollar Set for Second Weekly Gain

The dollar index held above 101 on Friday after rising for four consecutive sessions, trading at its highest level in nearly two months and remaining on track for a second straight weekly gain. The greenback firmed as elevated oil prices and strong US economic data fueled inflation concerns, bolstering expectations that the Federal Reserve may tighten policy further.

Futures markets are now pricing in roughly a 67% chance of an additional Fed rate hike in October, following last week’s increase. New York Fed President John Williams noted that the central bank still has “a lot of work to do” to bring inflation under control, while Philadelphia Fed’s Anna Paulson indicated that some modest further policy tightening could be justified.

On the data front, US weekly initial jobless claims unexpectedly slipped by 1,000 to 197,000, a two-month low, underscoring continued strength in the labor market. Investors are now looking ahead to Friday’s consumer sentiment and durable goods reports for additional insight into the economic outlook.