Dollar set for best week in a month as sterling nurses losses

The dollar was largely steady against other major currencies on Friday but set for its best week in a month thanks to a stronger tone to economic data.

Sterling, which has taken a beating from renewed concern over a hard Brexit, was set for its worst week in over two years against the greenback. Against the euro, the pound was poised for its largest weekly loss since July 2017.

Trade was generally subdued ahead of the Christmas and New Year holiday period.

A final reading of U.S. economic growth in the third quarter, due out later, was expected to get some attention.

Data this week has fueled expectations that the U.S. Federal Reserve is unlikely to cut interest rates again in the near future, bolstering the dollar.

The dollar index was a touch firmer at 97.41 .DXY. It has recovered almost 0.9% from five-month lows hit last week and is up 0.3% this week, poised for its biggest weekly rise in a month.

“We’ve held a constructive view on the dollar for two years and expect it to hold relatively steady in the first half of next year, then weaken against the euro as we think the Fed will have to cut rates again,” said Piotr Matys, a currency strategist at Rabobank.

The euro was flat at $1.11210 EUR=EBS, while the dollar was a touch firmer at 109.39 yen JPY=EBS.

The Chinese yuan CNH= held just on the strong side of the symbolic 7-per-dollar as China's unveiling of new tariff exemptions on U.S. chemical and oil product imports supported optimism about the Sino-U.S. trade detente.

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