The dollar index steadied around 102 on Friday after facing heightened volatility in recent sessions, as traders assessed a flurry of US data released Thursday which indicated that aggressive interest rate hikes from the Federal Reserve are already having an impact on the economy. However, lower-than-expected unemployment claims in the US last week signaled another month of solid job growth and continued labor market tightness.
Meanwhile, a chorus of Fed officials reiterated their commitment to tighter policy this week, with Vice Chair Lael Brainard saying rates would need to stay elevated for a period to further cool inflation. Still, easing US inflation drove expectations that the Fed will downshift to a smaller 25 basis point rate hike in February after delivering a half-percentage point increase in December.