Dollar set for weekly drop despite upbeat economic data

The U.S. dollar showed a slight advance against major currencies on Friday, yet set for a weekly to halt its recent upside rally. 

Despite upbeat reports released this week from the United States this week, the green currency faced some downside pressure on profit taking after it climbed to a record high versus a basket of major currencies.

Consumer confidence (final reading) rose to 82.5 from a preliminary of 79.2, beating analysts’ forecast of rising to 80.0.

The upbeat reports add to the case the Fed may reconsider the timing at which it would hike interest rates.

However, investors will probably wait until next Friday to gather stronger clues from the awaited non-farm payrolls.

The dollar index, which tracks the green currency’s movements versus a basket of six major currencies, fell to 81.50 after visiting a low of 82.75 on August 27.   

The EURUSD was little changed to trade near the session’s opening after hitting a high of 1.3194 and a low of 1.3158.

Next week, all eyes will focus on the ECB monetary decision amid expectations policymakers will introduce new measures to stave off low inflation, after a report showing the rate plunged to a five-year low in August.

The GBPUSD rose for a third straight session to trade around 1.6600, after finding support at 1.6535.

The BOE will also announce its monetary decision, but analysts’ predict no change in monetary policy in September.

The USDJPY snapped some of the losses incurred over the previous two sessions to hover around 103.85.