Investing.com – The U.S. dollar was largely steady on Friday, staying on course for a fourth straight week, helped by falling expectations for aggressive Fed rate cuts and heightened political uncertainty.

At 04:25 ET (08:25 GMT), the dollar index, which tracks the greenback against a basket of six other currencies, was trading slightly lower at 103.880, still on track for a weekly gain of about 0.6%.

The dollar stabilizes ahead of wage data

The dollar strengthened on Friday after a slight decline in the previous session due to lower yields on US treasury bonds.

But overall, demand remained sturdy for most of the month as reasonably sturdy economic data showed the market had reduced expectations for more significant rate cuts by the Federal Reserve in the near future.

This relative serene may disappear next week, with a very essential report from the US due next Friday.

However, ahead of this release, attention may shift to the upcoming US presidential election as market bets grow on a possible return of Donald Trump.

“Polls clearly tell us the election is too close to call, but markets and betting odds are increasingly leaning in Trump’s favor,” ING analysts said in a note.

“This may be due to the experience of the last two elections where polls underestimated Trump, but also to the greater need for safeguards for the Trump presidency, which is perceived as a macro/market event with a greater impact due to protectionism, tax cuts, stringent migration policies and risks to Fed independence.”

Will the ECB consider a gigantic cut?

In Europe, slightly higher at 1.0833, on track for a weekly loss of more than 0.3%.

Data showed on Friday that there was a slight boost in October, but sentiment remains faint after economic activity in the euro zone slowed again this month.

The Monetary Policy Council has already cut interest rates three times this year, each time by 25 basis points, but expectations are growing that the central bank will consider a larger cut at its next meeting.

“Bundesbank President Joachim Nagel was asked twice during his stay in Washington whether he would consider cutting interest rates by 50 basis points in December, and on both occasions he refrained from expressly opposing,” ING said. “Nagel is one of the most hawkish members of the Governing Council and a month ago would probably have answered with a clearer ‘no.’

it was unchanged at 1.2972, heading for a weekly loss of around 0.5%, but also rebounded from a two-month low hit on Wednesday.

The Governor of the Bank of England speaks in Washington on Saturday, with investors looking for any comments on likely future policy after he warned earlier this month that the central bank could become “a little more activist on interest rate cuts” if there will be further good news on inflation.

Yen looks to the weekend’s elections

rose 0.1% to 152.02, staying near three-month highs, and the pair was headed for a 1.6% gain this week – its fourth straight week of gains.

Sentiment towards Japanese markets has deteriorated significantly ahead of Sunday’s general election, with local polls showing that an alliance led by the ruling Liberal Democratic Party may struggle to gain a majority.

This could leave Prime Minister Shigeru Ishiba facing an uphill battle to implement more economic reforms.

rose to 7.1209, the volatility fluctuated due to the Chinese National People’s Congress meeting, which was initially scheduled for slow October but now appears to have been pushed back to November.