Dollar Posts Third Weekly Loss in Four Weeks as U.S. Inflation Eases; EUR/USD, GBP/USD Steady

The U.S. dollar posted its third weekly loss in four weeks on Friday, February 13, as the consumer price index eased, prompting slightly higher expectations for further Fed rate cuts. The DXY fell 0.1% to 96.87. Data showed U.S. CPI year-over-year at 2.4% in January, down from 2.7% in December and below expectations of 2.5%. Core PCE is expected to trend lower, according to Morgan Stanley economists, potentially keeping the Fed on pause for now despite sticky inflation and input cost pass-through. Key currency movements: EUR/USD = 1.1873, GBP/USD = 1.3655, USD/JPY = 152.68, AUD/USD = 0.7074, USD/CAD = 1.3618. Eurozone and the EU’s Q4 GDP were revised to +0.3% annualized, exceeding the ECB’s prior estimate of +0.2%. The pound rose on growth weakness and renewed political uncertainty in the UK. The dollar also declined against the yen amid hawkish comments from Japanese officials and uncertainty over expanded fiscal stimulus.