The US dollar edged higher Friday, but was on course for a weekly loss after core inflation eased, while sterling retreated following the release of weak retail sales data.

At 04:30 ET (09:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% higher to 108.930, but was set for a drop of about 0.5% in the week, which would snap a six-week winning streak.

The dollar has retreated this week after cooler than expected inflation data raised the possibility of easier monetary policy this year, even after policymakers at the Federal Reserve indicated they would be cautious in its approach to cutting rates this year.

In Europe, GBP/USD traded 0.4% lower to 1.2197, after British retail sales fell unexpectedly in December, dropping by 0.3% in month-on-month terms in December after a downwardly revised 0.1% expansion in November, raising the risk of an economic contraction in the fourth quarter.

Data released earlier in the week showed that the British economy barely returned to growth in November.

The Bank of England is expected to cut interest rates in February, with two rate cuts in 2025 largely priced into the market.

EUR/USD fell slightly to 1.0300, ahead of the release of the final eurozone consumer price index for December.

In Asia, USD/JPY climbed 0.3% to 155.79, near its strongest level in nearly one month.

The yen firmed sharply this week as several Bank of Japan officials suggested that an interest rate hike was possible when the central bank meets next week.

Source: Investing.com