Dollar Dips Amid Mixed Economic Signals and Fed Rate Speculations

The dollar remained under pressure Friday, buffeted by unexpected economic signals that include a surge in U.S. jobless claims and a modest rise in inflation. These factors have kept investors closely watching potential Federal Reserve interest rate cuts in the coming weeks.

After snapping a two-day winning streak, the dollar index was last seen trading at 97.585 and is on course for its second consecutive weekly decline. This comes as the biggest weekly rise in new U.S. jobless claims in four years overshadowed inflation data from August, which showed a modest and expected increase in consumer prices.

With the Federal Reserve's policy meeting on the horizon, the mixed economic data could complicate policy deliberations, although investor focus remains predominantly on potential interest rate cuts. Market analysts suggest a shift in monetary policy seems imminent, but traders are tempering their expectations for more significant rate cuts following recent economic assessments.

(With inputs from agencies.)