The U.S. dollar slipped on Friday and was heading for its first weekly decline this month.
According to Reuters, traders narrowed down bets on where interest rates may peak and brought forward their views on the timing of rate cuts to counter a possible recession.
A significant factor this week has been the fall in oil and commodity prices. This has eased inflation fears and allowed equity markets to rebound.
This has also eroded the safe-haven bid that has been boosting the dollar against other major currencies.
By 1210 GMT, the dollar index , which measures the U.S. unit against six major currencies, was flat to marginally weaker around 104.3. It rose 0.2% on Thursday, mostly driven by a euro decline after weak business activity data reduced bets for European Central Bank tightening.
The dollar has lost some of its shine since investors started betting the Federal Reserve could slow the rate-tightening pace following another 75 basis-point increase in July. They now see rates peaking next March around 3.5% and falling by nearly 20 bps by July 2023.
