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Shafaq News/ The dollar headed for its biggest weekly decline since mid-January on Friday, as a view prevailed among investors that the Federal Reserve will abandon raising interest rates this month, which will reduce the dollar's attractiveness to non-American buyers.
The US Senate's passage of a bill to suspend the debt ceiling and avoid a catastrophic default also removed a pillar of support for the dollar, which ironically had been one of the main beneficiaries due to its safe-haven status.
The Australian dollar rose after the increase in the minimum wage raised the central bank's bets on raising interest rates again next week.
The dollar index, which measures the US currency against six others, fell by about 0.8 percent this week, in its biggest weekly loss since mid-January. It was last down 0.1%.
Some weakness in US manufacturing data overnight supported the pause, although jobs numbers continued to rise, with more focus than usual on the monthly non-farm payrolls report later in the day.
Money markets are pricing in an upside potential of around 29%, down from around 70% earlier in the week.
The dollar rose to the positive zone against the yen, after recording the longest series of daily losses against the Japanese currency since last November, with four days of decline. The dollar was last up 0.1% at 138.89 Japanese yen.
The pair tends to track long-term US Treasury yields, which were at 3.61% after falling to their lowest since November 18 overnight.
The euro settled at $1.0769, after hitting a one-week high of $1.07685 on Thursday, when European Central Bank President Christine Lagarde said further policy tightening was necessary.
Meanwhile, the US Senate passed a bill to raise the government's $31.4 trillion debt ceiling on Thursday, preparing it for President Joe Biden's signature before Monday's deadline.
The Australian dollar rose as much as 0.68% to $0.662, the strongest level since May 24. The primary trigger was the announcement by Australia's independent wage-setting body that it will raise the minimum wage by 5.75% from 1 July.
Traders are currently placing a 67% chance that the central bank will raise interest rates by 25 basis points. Even if there is no rally next week, the markets are anticipating a rally by the fall.
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