Dollar Retreats Amid Uncertainty About Size Of Upcoming Rate Hikes

(RTTNews) - After climbing higher in the Asian session on Friday, the U.S. dollar turned weak as the day progressed, amid uncertainty about the pace of interest rate hikes by the Federal Reserve in the coming months.

According to reports, the central bank officials are likely to engage in a potential debate about the pace of rate hikes. While a few officials are reportedly looking at a 75-basis point hike next months, a few others are said to be in favor of slowing down the pace of rate hikes.

San Francisco Federal Reserve Bank President Mary Daly said today that the central bank should avoid aggressive tightening as it could put the U.S. economy into an "unforced downturn." She added that the Fed is nearing a point where it should slow rate hikes.

The dollar had surged higher earlier in the day, reacting to hawkish comments from Philadelphia Federal Reserve President Patrick Harker that rate hikes will continue "for a while" to combat inflation.

The dollar index, which surged to 113.94 in the European session, dropped to 111.70 by noon, and was last seen at 111.83, down nearly 1% from the previous close.

Against the Euro, the dollar dropped to 0.9862 from 0.9788.

The dollar has weakened to $1.1300 against Pound Sterling, after having firmed to $1.1061 during the European session.

The Japanese currency has strengthened to 147.65 yen a dollar from 150.15 yen.

Against the Aussie, the dollar has dropped to 0.6383, losing more than 1.6% from the previous close.

The Swiss franc has strengthened to CHF 0.9981 against the dollar, gaining more than half a percent.

The dollar is down against the loonie, fetching C$1.3646, compared with C$1.3766 a dollar on Thursday.