Dollar set for second weekly gain amid US economic resilience

Economic Resilience and Dollar Performance - The dollar experienced a decline of 0.21% to 149.48 against the Japanese yen, yet it is on track for a fifth consecutive week of gains, trading near its highest level since August 1 [1] - U.S. consumer spending rose by 0.6% in August, surpassing the 0.5% estimate by economists, indicating strong economic activity [2] - The Personal Consumption Expenditures Price Index increased by 0.3% last month, aligning with expectations, which suggests stable inflation [3] Federal Reserve's Interest Rate Outlook - Stronger economic data has diminished expectations for Federal Reserve rate cuts, affecting the interest rate differential with other countries and contributing to the dollar's strength [3][4] - Richmond Fed President Thomas Barkin noted limited risks of significant rises in unemployment or inflation, allowing the Fed to balance its goals while considering further interest rate cuts [6] - Fed Vice-chair for Supervision Michelle Bowman stated that the central bank is close to achieving its 2% inflation target and emphasized the need for decisive interest rate cuts to address potential job market issues [6][7] Market Reactions and Trends - The dollar index fell by 0.33% to 98.17 but remains on track for a second consecutive week of gains [5] - The yield on the two-year note decreased by 1.8 basis points to 3.645%, reflecting changes in interest rate expectations [5]