Dollar declines due to uncertainty surrounding US interest ‎rates

US dollar was under pressure on Friday due to uncertainty surrounding the path of US interest rates, while the euro maintained overnight gains with data indicating that the decline in the euro zone may be abating.

According to Reuters, the dollar index, which measures the performance of the US currency compared to six currencies, fell by 0.029% to 103.73, remaining close to the lowest level in two and a half months at 103.17, which it touched earlier in the week.

During the month, the index declined 2.8% and is heading to record the weakest monthly performance in a year amid growing expectations that the Federal Reserve (the US central bank) has finished raising interest rates and may begin lowering them next year.

The euro recorded $1.0904 after it rose 0.16 percent overnight following a series of preliminary surveys that showed that the recession in Germany may be less than expected, which offset a pessimistic reading of business activities in France.

Meanwhile, core consumer price growth in Japan rose slightly in October, after declining the previous month, supporting investor views that persistent inflation may prompt the Bank of Japan to pull back on monetary stimulus soon.

Economists at ING said they expect the Bank of Japan to move away from its ultra-lenient stance next year.

The Japanese yen rose 0.04% to 149.49 per dollar. The Asian currency is slowly moving away from the lowest level in 33 years of 151.92, which it touched at the beginning of last week. It rose 1.5% during the month

A survey on Friday showed that factory activity in Japan contracted for the sixth month in a row in November, while there was little change in modest growth in the services sector, highlighting the fragility of the economy amid weak demand and continued inflation. British Pound up 0.5% to trade at $1.2539 during the day.

The Australian dollar rose 0.14% to $0.657, and its New Zealand counterpart rose 0.07% to $0.605.